The UK government is considering reducing health-related benefits as part of a broader overhaul of the work capability assessment (WCA) system, according to employment minister Alison McGovern.
She stated that current spending on incapacity benefits is fiscally unsustainable, with a need for reforms to encourage more people into work while ensuring financial support remains available.
McGovern described the existing system as one that “leaves people on the scrapheap“, arguing that the WCA process forces claimants to focus on their worst health days rather than their potential to work.
A green paper is set to be published this month outlining proposed reforms aimed at reshaping disability assessments and modifying the benefit structure.
Government Aims to Balance Support and Fiscal Sustainability
The government’s primary concern is the rising cost of health-related benefits, which currently amounts to £65 billion annually, according to official figures.
Under the present system, individuals deemed unfit to work receive around £5,000 per year in incapacity benefits—double the standard jobseeker’s allowance—without being required to seek employment.
McGovern acknowledged that while some people genuinely cannot work, the system should better support those who wish to return to employment. She pointed to data suggesting that 200,000 incapacity claimants have expressed a desire to work immediately, but fear losing financial support if they attempt employment that proves unsuitable.
According to the Office for Budget Responsibility (OBR), the government needs to reduce spending by at least £3 billion over the next five years.
While previous Conservative proposals sought to exclude certain claimants, Labour is considering a more nuanced approach, potentially reducing benefit levels for some recipients rather than removing entire groups from support.
Reforming the Assessment Process and Employment Support
The work capability assessment (WCA) has faced long-standing criticism for its binary approach to disability and illness. Conducted mostly online, it provides few reassessments after initial approval, leading to concerns that some claimants are left with inadequate support or no incentive to work.
McGovern argued that the current WCA structure “doesn’t work for anybody”, as it requires individuals to prove how sick they are rather than assessing their ability to work with appropriate support.
The government is exploring the possibility of combining means-tested incapacity benefits and disability benefits into a single, more flexible system that could provide graduated or time-limited support.
Additionally, the Department for Work and Pensions (DWP) is expected to expand employment support programmes, particularly for those who express an interest in working.
Some officials believe that if sufficient resources are allocated to help incapacity benefit claimants into employment, potential savings could exceed the initial £3 billion target.
The OBR, however, remains sceptical about the effectiveness of welfare reform in achieving long-term savings, citing past failures in similar initiatives. While the Treasury focuses on cost reduction, DWP ministers are advocating for a balance between financial savings and employment opportunities.
The forthcoming green paper is expected to provide more details on how the government plans to restructure disability assessments, modify benefit levels, and implement employment support schemes, as Labour seeks to navigate the political and economic challenges of welfare reform.
