The Department for Work and Pensions (DWP) is considering a new "pound-for-points" system for Personal Independence Payment (PIP) that could see claimants with cancer receive £500 less each year. The proposal comes as recommendations from the Timms Review into the benefit, claimed by 4 million people, begin to emerge.
The Institute for Fiscal Studies (IFS) has urged the DWP and the Labour government to adopt this points-based approach, which would reduce the value of each PIP point. The think tank argues that the current system is not delivering value for money and that reform could target support more effectively.
IFS Urges Government to Rethink PIP Generosity
The IFS stated: "The government could reduce the generosity of the disability benefit system specifically for young people, perhaps if it considers any negative effects of receiving these benefits to be larger for those who have a whole working life ahead of them." This suggests a potential shift in how PIP is awarded, with a focus on age-based criteria.
The think tank highlighted that 689,000 people under 30 claim PIP, representing 20% of the total working-age PIP caseload, and accounting for £5.5 billion per year in spending. However, young recipients are disproportionately likely to have the most severe disabilities; 12% of 16- to 19-year-old recipients receive at least 31 points in the PIP daily living assessment, compared with 5% among all PIP recipients.
Potential Impact on Younger Claimants
If policymakers chose to keep providing PIP for young people with more severe disabilities (proxied as those who get the highest possible award) while removing it for others, the impact on the caseload and spending would fall to 327,000 and £2.2 billion respectively, before accounting for any behavioural responses. This approach would target the most vulnerable young claimants while reducing overall expenditure.
The IFS's analysis suggests that a pound-for-points system could reduce annual payments for some claimants, including those with cancer, by approximately £500. This would be a significant change for the 4 million people currently receiving PIP, many of whom rely on the benefit to cover additional costs associated with their conditions.
Government Response and Next Steps
A Department for Work and Pensions spokesman said: "The Timms review interim report made clear that PIP is no longer fit for purpose. The recommendations from the final report, due in autumn, will pave the way for sustainable reform."
The spokesman added: "This comes on top of action we are already taking to fix the broken welfare system, including by increasing face-to-face assessments and extending award review periods to deliver savings of around £2bn while removing unnecessary pressure on disabled people." The final Timms Review report is expected in autumn, and its recommendations will shape the future of PIP for all claimants.
