DWP confirms PIP and Motability changes for people with disabilities and health conditions
The Government department has announced major benefit changes, including PIP assessments, Motability reforms and Universal Credit updates.
The Budget took place last week on November 26 (Image: Getty)
The Department for Work and Pensions (DWP) has confirmed plans announced by Chancellor Rachel Reeves in the Autumn Budget to ‘make health and disability benefits more sustainable in the future’.
In the latest edition of the Touchbase newsletter, the DWP outlined all the key modifications for benefit claimants. This encompasses boosting the volume of in-person evaluations throughout Personal Independence Payment (PIP) and the Work Capability Assessment (WCA) to ‘ensure people are receiving the right support’.
The UK Government stated that it will also expand WCA reassessment capacity and decrease the number of PIP recipients being called for award reviews when their condition has not changed. The DWP also verified that most working-age and disability benefits will increase by 3.8 per cent from April.
Changes to the Motability Scheme have been revealed, too. These encompass scrapping the VAT relief on additional payments, a one-off voluntary contribution needed to lease pricier vehicles through the scheme, and the implementation of Insurance Premium Tax on rentals.
Tax alterations will not significantly affect vehicles modified for wheelchair users or those with current leases. Motability will continue to supply vehicles at no extra charge, up to the value of qualifying disability benefits.
In a recent Touchbase newsletter, the DWP detailed several big changes (Image: Getty)
Beyond this, the DWP recently confirmed it plans to complete the migration of claimants on income-related Employment and Support Allowance (ESA) to Universal Credit by March next year, according to the Daily Record. Sir Stephen Timms, Minister for Social Security and Disability, also stated that part of this migration process will see ESA claimants move to the Universal Credit Health Element.
Furthermore, the DWP intends to abolish the two-child limit in Universal Credit from April 2026. This move is expected to lift an estimated 450,000 children out of poverty by the end of this Parliament, providing them with a better start in life. This number is projected to rise to around 550,000 when combined with other measures announced this year, such as the introduction of free school meals.
From April 2026, the rates for the State Pension and working-age benefits are expected to increase. In line with the average weekly earnings growth component of the Triple Lock, the New and Basic State Pension will rise by 4.8 per cent, amounting to an extra up to £575 annually.
Working-age benefits will be adjusted in line with the September Consumer Price Index inflation rate of 3.8 per cent, with the exception of rates for the Universal Credit standard allowance and health element. These are legislated until April 2029 and include a real terms increase of the standard allowance.
The UK Government has also announced that employer and employee National Insurance Contributions will be charged on pension contributions above £2,000 per annum made via salary sacrifice.
These changes will be implemented through primary and secondary legislation, which will be introduced in due course and will take effect from April 6, 2029.
Lastly, it’s important to mention that the UK Government is allocating £820 million across the spending review period to deliver a Youth Guarantee. The Chancellor revealed at the Labour Party Conference in September 2025 that the Youth Guarantee will include a new Jobs Guarantee.
