The Department for Work and Pensions (DWP) has issued a Personal Independence Payment (PIP) eligibility announcement following a rule change that took effect this week. The DWP confirmed that changes to the Motability Scheme, driven by "fairness for the taxpayer," do not apply to Wheelchair Accessible Vehicles and that the core Motability package remains unchanged.
No Change to PIP Eligibility or Existing Leases
The DWP emphasized that eligible disabled people can continue to access a vehicle, scooter, or powered wheelchair through the scheme, with insurance for up to three drivers, UK breakdown cover, and maintenance included. Crucially, the department stated: "There is no change to existing leases and no change to eligibility for PIP or the Motability scheme." The Motability Foundation will continue to offer means-tested grants to support those who would otherwise struggle to afford advance payments, adaptations, or wheelchair-accessible vehicles.
VAT and Insurance Premium Tax Changes
The changes include VAT now applying to advance payments and Insurance Premium Tax applying to new leases. These adjustments are expected to save £1 billion of taxpayer money, according to the DWP. Disabled people on enhanced mobility benefits will continue to receive their full award of £77.05 per week and remain eligible for the scheme, with vehicles still available that require no advance payment, meaning people can access a car using their benefit alone.
Government Statement on Fairness
Labour Party Work and Pensions Secretary Pat McFadden MP said: "Today’s changes are driven by the fairness that underpins this Government - fairness for the taxpayer, fairness for disabled people, and fairness for the country. We’re saving £1 billion of taxpayer money by removing VAT relief from some new Motability leases, whilst ensuring the scheme still supports disabled people’s mobility and independence. We’re building a fair welfare system and an economy that works for everyone."
Removal of Luxury Vehicles
The announcement follows the removal of luxury vehicles, including BMW and Mercedes models, from the scheme after the Budget from Chancellor Rachel Reeves last year.
