The Institute for Fiscal Studies (IFS) has proposed a new 7-point rule for Personal Independence Payment (PIP) claimants as part of a radical shake-up to the benefits system. The think tank's latest report, released on Thursday, suggests replacing the current two-level award structure with a proportional £-per-point system.
Under the proposed model, claimants would receive an award directly proportional to the number of points they score in the PIP assessment. However, no payment would be made for the first seven points on either the daily living or mobility component, effectively creating a threshold that claimants must exceed before receiving any financial support.
How the proposed system would work
The IFS explains that a "simple illustrative alternative, which we model here, is a £-per-point system in which claimants receive an award that is proportional to the number of points they receive in the PIP assessment." The report adds: "We maintain the restriction that no award is made for the first seven points scored on either the daily living or mobility component."
The think tank has calculated the award for each number of points under this proportional system, comparing it with the current framework. The IFS set the award for each point at a level designed to keep overall spending on each component the same as it currently is, before accounting for any behavioural changes.
Financial impact on claimants
The implications for individual claimants would be significant. A person scoring 12 points in the daily living assessment would receive £4,240 per year, which is £1,720 less than they would get under the current system. Conversely, a person scoring 32 points would receive £11,310 annually, £5,350 more than they receive now.
The report suggests there are "many ways" to make the system more sensitive to the level of assessed disability, with the proportional model being just one illustrative example of how the assessment could be reformed.
Government review underway
The proposals come as the Labour government and the Department for Work and Pensions (DWP) face mounting pressure to reduce the benefits bill. The Timms Review, the first of its kind in the 13 years since PIP was introduced, is being co-produced by the DWP and a panel of disabled people. The steering group is co-chaired by the minister for social security and disability, Stephen Timms, alongside disability experts Sharon Brennan and Clenton Farquharson.
This review is expected to consider various options for reforming PIP, including the kind of proportional system modelled by the IFS. The final outcome will determine whether claimants see significant changes to how their disability benefits are calculated in the coming years.
