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DWP Data Uncovers £1bn in Unclaimed PIP as Bill Locks in Universal Credit Health Cuts

MPs have greenlit cuts to Universal Credit’s health top-up for new claimants, deferring PIP eligibility changes until Sir Stephen Timms’s co-produced review concludes.

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Overview

  • New DWP figures reveal about 402,500 PIP claimants—around 11% of the total—are missing out on roughly £1.06 billion annually, even as PIP spending rose to £25.8 billion in 2024/25.
  • The Welfare Reform Bill passed its final Commons vote by 336–242, enshrining from April 2026 a cut to Universal Credit’s limited capability health element for new claimants from £423.27 to £217.26 per month, frozen through 2029.
  • The government has postponed planned PIP eligibility tightening until a co-produced assessment review led by Sir Stephen Timms reports its findings, with terms of reference published and stakeholder engagement set for this summer.
  • The Centre for Social Justice has proposed further narrowing mental health benefit eligibility—targeting milder anxiety, depression and ADHD—to save an estimated £7.4 billion a year by 2029/30.
  • Disability charities warn that requiring claimants to be “constantly unable” to perform tasks risks excluding people with fluctuating conditions such as Parkinson’s and multiple sclerosis.