There are questions around whether Labour will continue with a punitive sanctions regime, or if it will take a more compassionate approach. And it also has plans to crack down on welfare fraud, which campaigners fear will involve “snooping” on benefit claimants’ bank accounts.
Here’s everything to look out for in Labour’s plans for the benefits system in 2025.
What is the government planning for disability benefits in 2025?
The government is set to announce full details of its plans to reform the disability benefits system in spring 2025.
There is little doubt among claimants, charities and experts that the system is in need of change. Disabled people have told the Big Issue about their “traumatic” experiences undergoing benefits assessments, which often takes a toll on their physical and mental health.
On top of this, there are a record 2.8 million people who are out of work due to long-term sickness, and an increasing number of people are relying on disability benefits as a result. This leads to a highly-pressurised DWP system which negatively impacts claimants, while also costing the government billions.
So what does Labour plan to do about it? The government has pledged to work with disabled people so that their “views and voices are at the heart of all we do” and ministers have said that they will take a different approach to the Conservative government.
But ministers have also repeatedly said that they want more disabled and ill people into work, with initial steps laid out in the ‘Get Britain Working’ white paper.
There were elements of this that were welcomed, including the pledge to transform Jobcentres to provide more tailored and local support and the promise to fix the NHS.
But experts have warned this must not come alongside the DWP threatening to axe people’s benefits. This could negatively impact claimants’ health and have the adverse impact of pushing them further away from the workplace.
Although plans for disability benefits are still being considered, the government has confirmed it will honour £3bn in savings which the Conservative government had announced regarding the work capability assessment.
This is an assessment that people with health conditions and disabilities undergo to determine their capability for work and if they will get an extra amount of universal credit. The Conservative plan would have seen hundreds of thousands of people miss out on support over the next few years.
Labour has not said it will follow the same approach to cutting £3bn from the disability benefits bill – but charities are concerned about what its plans may entail.
Ayla Ozmen, director of policy and campaigns at anti-poverty charity Z2K, said: “This has received worryingly little attention, despite the fact that it is inconceivable that these cuts can be implemented without pushing disabled people into deep poverty.
“The cuts risk undermining the government’s aims by pushing disabled people further from work, deepening child poverty and increasing reliance on food banks – at a time when 70% of food bank users are already disabled. The government must ensure that the disability benefits system provides security and genuine support, not more cuts and sanctions.”
The government has promised that a consultation into the disability benefit changes will be published in spring, in which disabled people will have the opportunity to respond to the plans.
Will the Labour government move away from a punitive benefits system and sanctions?
There will still be sanctions in the benefits system in 2025, with the Labour manifesto saying that there will be “consequences” for people who do not “fulfil their obligations” for seeking work.
But there are some signs that Labour will take a more compassionate approach than the previous government. Keir Starmer promised to “put an end to the culture of blaming and shaming people who for too long haven’t been getting the support they need to get back to work”.
Meanwhile, Stephen Timms, who is the minister for social security and disability in the DWP, told the Big Issue ahead of Labour coming into power that he wants a less “hostile” benefits system which supports people into employment, rather than forcing them into “unsuitable jobs.”
“I think Jobcentres should be places that you go to be helped, not hit,” Timms said at the time.
The Office for Budget Responsibility (OBR) previously found that a high number of sanctions has helped drive the growing number of disability benefit claims.
A disability campaigner who goes by the name of Ben Claimant said: “What I want from the new Labour government is a fundamental overhaul of the social security system, but failing that, the reform and abolition of benefit sanctions and conditionality would be a good first step.
“DWP forces people to take any job under the threat of financial punishment and this has a detrimental effect not just on a claimant’s health and wellbeing, but also their children. However, this is unnecessary as people do not need to be ‘incentivised’ by benefit sanctions to find work.
“What claimants want is good quality advice and support to find the right job that suits their personal circumstances – and work coaches want to offer that. The irony is that removing sanctions and conditionality would save the DWP money and free up the workloads of its staff to provide that support.
“I suspect it would also result in a better economy as it would stop people having to take on low paid, insecure work that offers little in way of tax to support the economy. It would also have benefits for the DWP as it would improve the workplace and aid staff retention. Work coaches are there to help. They don’t want to be enforcers and punish people.”
Shelley Hopkinson, head of policy and influencing at Turn2us, said that the government must “tackle stigma” within the benefits system and “build on the positive shift in how social security is spoken about”. She said to do this, the government must “go further by removing punitive sanctions and simplifying access to support for anyone who needs it”.
How much are benefits rising in 2025? And is it enough?
Benefits will increase by 1.7% from April 2025. This is because benefits are generally increased by the September’s rate of inflation, which was 1.7% – the lowest rate seen in three and a half years.
It will mean an increase of “just a few pounds” each month for most claimants, charities have said.
Hopkinson, at Turn2us, said: “We need decisive action on the deepening levels of poverty and financial insecurity gripping communities across the UK. Long-term strategies for reform must not overshadow the immediate steps that we know can lift millions out of hardship.”
She said the government must “urgently” raise universal credit to cover essential living costs.
The Joseph Rowntree Foundation and Trussell Trust have estimated that the standard rate of universal credit falls short by around £120 every month currently. Backed by organisations including the Big Issue, they have consistently called for the DWP to implement an ‘essentials guarantee’ – a pledge that universal credit will be enough for people to afford their basic essentials at the least.
What are the government’s plans for cracking down on welfare fraud? Will they ‘snoop’ on benefit claimants’ bank accounts?
The government has announced that it will be cracking down on welfare fraud – and officials could be given “direct access to bank accounts” in the process.
Rachel Reeves said in her autumn budget: “I can today announce a crackdown on fraud in our welfare system, often the work of criminal gangs.
“We will expand DWP’s counter-fraud teams using innovative new methods to prevent illegal activity and provide new legal powers to crackdown on fraudsters, including direct access to bank accounts to recover debt. This package saves £4.3bn a year by the end of the forecast.”
The Big Issue understands that the debt power applies to those where an overpayment has been identified, and steps such as mandatory reconsideration and appeals will be taken before debt is recovered from the bank accounts.
The DWP is expected to make multiple attempts to contact people and offer them the option to negotiate a repayment plan, and there will be additional safeguards to ensure affordability and vulnerability.
But there remain concerns about the impact this could have on vulnerable people. Susannah Copson, of Big Brother Watch, recently wrote in the Big Issue: “It is difficult to see how these powers will be anything other than a regurgitated financial snooper’s charter – spying on all of us, but targeting automated suspicion of disabled people, carers, and some of Britain’s poorest.
“Tackling fraud is a legitimate and necessary objective. However, the government cannot sacrifice the financial privacy of welfare claimants in its feverish desperation to look tough on fraud. In doing so, Labour risks prioritising an authoritarian image over the lives of real people – people it should be supporting.”
Will the Labour government remove the two-child limit on benefits?
Labour remained firm in its decision to keep the two-child limit on benefits last year, but ministers have kept the option open to remove the policy in the future.
Education secretary Bridget Philippson previously highlighted that it is “not a policy that the Labour government introduced” and that it would be considered as one of a “number of ways” to lift children out of poverty. However, she said it would be “very expensive” to remove the two-child limit.
The government launched a ministerial taskforce, chaired by Philppson alongside DWP secretary Liz Kendall, which is set to launch its child poverty strategy in spring 2025.
It published its Tackling Child Poverty policy paper in October and promised to address the “systemic drivers” of poverty, but there was no mention of the two-child limit on benefits.
Charities have called the policy “cruel” and “unfair”, and it is believed that hundreds of thousands of children could be lifted out of poverty if the two-child limit on benefits was scrapped.
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