The UK government is preparing to overhaul the work capability assessment (WCA) system as part of a broader effort to cut health benefits and reduce the rising costs of health-related support, which are projected to reach £100 billion annually by the end of the decade.
Concerns over the long-term affordability of these benefits have grown, prompting ministers to consider significant changes. GB News reports that the proposed reforms aim to strike a balance between fiscal responsibility and ensuring adequate support for those in need.
Employment minister Alison McGovern has indicated that the current system is financially unsustainable and requires urgent revision. While details remain unclear, the government is expected to outline its plans in a green paper later this month, addressing how to improve employment opportunities for those currently receiving incapacity benefits.
Rising Costs and Policy Concerns
Health-related benefits currently amount to £65 billion per year, a figure that continues to grow. If left unchecked, the system could cost up to £100 billion annually by 2030.
Under the existing system, individuals assessed as too sick to work receive incapacity benefits of approximately £5,000 annually, nearly double the standard unemployment benefit.
Once classified as unable to work, they are not required to seek employment and receive little to no support if they wish to re-enter the workforce.
McGovern has expressed concerns that the system is failing both financially and socially, leaving many people “on the scrapheap” while discouraging those who might want to work.
An estimated 200,000 people currently receiving incapacity benefits have expressed an interest in working but face barriers due to the rigid structure of the benefit system, which often limits their ability to transition off health benefits while seeking employment.
The issue is particularly pressing among young people, with nearly one million classified as “NEET“ (not in employment, education, or training) at the end of 2024.
The Case for Reform
The work capability assessment, which determines eligibility for health-related financial support, has been widely criticised for focusing on individuals’ limitations rather than their potential.
Employment minister Alison McGovern noted that claimants are forced to emphasise what they “can’t do on their worst day” rather than identifying ways they could be supported to find suitable employment.
Critics within the Department for Work and Pensions (DWP) argue that the WCA system is dysfunctional, primarily relying on online assessments with few reassessments after an initial claim is approved.
This has led to a system where many recipients remain on health benefits for long periods without opportunities for reassessment or employment support.
Proposed Changes and Political Considerations
The government plans to release a green paper this month outlining proposals to revise the WCA and explore alternative benefit structures.
One option under consideration is merging incapacity benefits with disability benefits, creating a single, more flexible assessment that could include time-limited support for some claimants. The reforms are expected to serve two primary objectives.
First, the government aims to reduce overall welfare spending, including health benefits, to ensure long-term fiscal sustainability and manage the rising costs associated with medical and disability-related support.
With benefit costs projected to rise sharply, ministers argue that the current system places too much strain on public finances. Second, policymakers want to increase employment participation among those who are capable of working with the right support.
Many claimants express a desire to work but struggle to navigate a system that provides little encouragement or assistance for re-entering employment.
While the Treasury is primarily focused on cutting costs, DWP ministers hope to redirect some savings towards employment support programmes.
However, previous attempts at welfare reform have struggled to achieve significant savings, and the Office for Budget Responsibility (OBR) remains sceptical about the financial impact of these changes.
The government aims to achieve at least £3 billion in savings over five years, a target already factored into OBR forecasts under the previous Conservative government.
