DWP's new unemployment benefit and changes to work capability assessments, explained

The government will scrap the controversial work capability assessment by 2028, Department for Work and Pensions (DWP) secretary Liz Kendall has announced, as well as creating a new unemployment insurance.

The work capability assessment (WCA), which determines extra support for health conditions given with universal credit, will be replaced with a single assessment under PIP, based on the impact of disability and ill-health, rather than a person’s inability to work.

Jobseekers’ allowance (JSA) and employment support allowance (ESA), will be merged into a new time-limited unemployment insurance. Paid at the current ESA rate of £138 per week, it will be time-limited and recipients do not have to prove they cannot work – but will be expected to actively seek work.

The changes form part of the Labour government’s reforms to the welfare system, with Keir Starmer saying there is a moral and economic case to reducing the number of people claiming benefits.

But a programme of employment support risked falling victim to penny-pinching, waned Helen Barnard, director of policy at Trussell.

“People at food banks have told us they are terrified of how they might survive. We welcome the positive proposals from the Department for Work and Pensions to boost the basic rate to universal credit and invest in employment support,” said Barnard. “However, we fear these steps will be undermined by a Treasury drive to make short-term savings.”

Read more of Big Issue’s analysis of Labour’s benefit reforms:

• Benefit cuts are a ‘violation of human rights’ which will harm ill and disabled people, Labour warned
• How Labour’s changes to universal credit are going to impact millions of Brits
• Cuts, universal credit and PIP: Everything you need to know about Labour’s benefits overhaul

Work capability assessment scrapped: What it means

Currently, the WCA tests people to see if they can get an extra amount of universal credit by scoring them on their ability to work.

This will be replaced with a single assessment – the PIP assessment – the main disability benefit, and unlinked from people’s ability to work. 

Those receiving the health element of universal credit will still be able to receive the work allowance, and can earn £404 a month before universal credit income is affected.

“We will also be legislating to guarantee that work in and of itself will not lead to someone being called for a reassessment or award review,” the government said in a green paper released alongside Kendall’s statement, as well as acknowledging the experience of the PIP assessment is “not always positive”, and committing to a review of the assessment.

Rishi Sunak’s government planned changes to the WCA which would have meant lower benefits or higher work-search conditions for around 457,000 people. These changes could have cost some people up to £416 per month, and were “dangerous and poorly thought out” said the Z2K charity. In January, the high court ruled a consultation on the changes had been unlawful.

Chancellor Rachel Reeves said in her autumn budget that Labour would deliver these Tory plans.

Mikey Erhardt, a campaigner at Disability Rights UK, said: “The government knows that the work capability assessment is deeply flawed but using the PIP assessment process as a gateway makes clear that its goal is not to create a new system based on dignity, support, and equity but limiting access to support for disabled people.”

Employment support and a new unemployment insurance

Under DWP plans, a new unemployment insurance will replace JSA and ESA. Almost all disabled people claiming this benefit would be expected to “as a minimum, to participate in conversations as part of a new offer of tailored employment support with appropriate exemptions”. However, people will not have to prove they cannot work in order to get the benefit.

After a time-limited period, claimants will be able to receive universal credit.

Alongside this, the government has promised to overhaul the system of employment support, which Kendall touted as the biggest reforms in a generation. The government said it aimed for better and more tailored support to get people into work, alongside an expectation to engage with support.

But statistics show 60% of people worry that asking for help would result in the DWP making them look for work they’re not suited for if they asked for help. This, said the government, proves people fear engaging with existing employment support

Jobcentres will be overhauled “into a genuine public employment service”, and a new jobs and careers service will be created.

All 18-21-year-olds will be offered either employment support, training, or an apprenticeship under a youth guarantee.

It will come with £1bn per year of additional investment by the end of the decade.

Stephen Evans, chief executive of the Learning and Work Institute, said government action should include working with employers to create a more inclusive system of work.

“Only one in ten out-of-work disabled people get help to find work, despite two in ten wanting to work. The green paper contains welcome steps to change that, including regular support conversations and a £1 billion expansion of voluntary employment support,” Evans said.

“But the devil is in the detail and it will take broad-based change to deliver lasting improvements to people’s lives and sustainable savings to the taxpayer.”

Do you have a story to tell or opinions to share about this? Get in touch and tell us more. Big Issue exists to give homeless and marginalised people the opportunity to earn an income. To support our work buy a copy of the magazine or get the app from the App Store or Google Play.