A major shake-up of the UK’s welfare system is facing sharp criticism from disabled workers and campaigners, who say new policies ignore the core barriers to employment. The Department for Work and Pensions (DWP) has laid out plans to revise Universal Credit and review Personal Independence Payment (PIP) by 2026, aiming to reduce economic inactivity.
Supporters argue the reforms will help more people into work. But those directly affected say the proposals rest on flawed assumptions — and risk deepening existing inequalities. At the heart of the issue is a persistent disability employment gap and pay disparity, which remain largely unaddressed by the current approach.
Widening Employment Gap and Financial Risk for Claimants
The Government’s plans include halving and freezing the extra payment for Universal Credit recipients who are deemed unable to work, officially labelled as having ‘limited capability for work and work-related activity’ (LCWRA). According to the DWP, this is meant to remove what it calls “perverse incentives” for people to avoid seeking employment.
Yet campaigners argue that these measures ignore deeper structural challenges. According to the Office for Budget Responsibility, there is little evidence to suggest that cutting welfare support leads to increased employment. Statistics show that only 53% of working-age disabled people are in employment, compared to over 82% of non-disabled individuals — a gap that has remained unchanged since 2019.
Jobcentre staff also report that employers are frequently unwilling to adapt roles or make necessary accommodations for disabled applicants. Grace True, a jobseeker from Sheffield, described how she felt forced to remove all references to her disability from her CV in order to receive a response from employers.
According to her account, it was only after making this change that she began to get interest from recruiters — a stark example, campaigners say, of the hidden discrimination disabled people face in the hiring process.
Meanwhile, a Government spokesperson has defended the reforms, highlighting a £3.8 billion investment in employment support and plans to place specialist job advisers in GP surgeries and mental health services.
Disability Pay Gap Highlights Unequal Labour Market
Pay inequality is another long-standing issue that campaigners say remains unaddressed. According to official figures for 2023/24, disabled employees earned an average of £13.68 per hour, compared to £16.03 for non-disabled employees — a 17.2% gap equating to 63 lost days of income per year.
Amelia Peckham, CEO of Cool Crutches and Walking Sticks, said this disparity means disabled people effectively stop earning on 29 October each year, while their peers continue until 31 December. “It’s devastating,” she said.
Campaigners are calling for targeted action, including stricter enforcement of anti-discrimination laws, wage support schemes, and mandatory accessibility standards for employers with government contracts. They argue that without these systemic changes, the 2026 reforms risk cutting support without addressing the real obstacles preventing equal participation in the workforce.
