DWP disability benefit changes from October could lose people £5,000 a year

The Labour Party and DWP shake-up will see Chancellor Rachel Reeves slash £3bn from the welfare bill in the Budget.

Department for Work and Pensions disability benefit changes in October could lose people £5,000 a year. The Labour Party and DWP shake-up will see Chancellor Rachel Reeves slash £3bn from the welfare bill in the Budget.

The tougher criteria could see 420,000 disabled or ill people lose vital financial support. The tougher criteria could see thousands lose out with experts warning some will face devastating cuts of up to £5,000 annually.

The Resolution Foundation, an independent think tank, has warned that slashing the benefits will leave these people struggling to make ends meet, calling on the Chancellor to rethink the plan. A Government source said: “We have always said that the Work Capability Assessment is not working and needs to be reformed or replaced alongside a proper plan to support disabled people to work.

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“We will deliver savings through our own reforms, including genuine support to help disabled people into work.” Ms Reeves has committed to delivering the £3bn in savings, but it will be up Ms Kendall to determine the specific changes needed to achieve that target.

The chancellor has warned that a £22bn “black hole” in the public finances – which Labour claims it inherited from the Conservatives – will persist over the next five years, forcing the new government to take “difficult decisions” on spending, welfare and tax.

Ms Reeves is aiming to make £40bn worth of tax rises and spending cuts a year to overcome the shortfall, in order to meet her “golden rule” of balancing day-to-day spending with tax receipts. This would help to avoid a fresh round of cuts to departmental budgets.

The chancellor is expected to commit to the previous Tory government’s plans to save the sum by reforming work capability rules, as first reported by the Telegraph. Under Conservative proposals, welfare eligibility would have been tightened so that about 400,000 more people who are signed off long-term would be assessed as needing to prepare for employment by 2028/29, reducing the benefits bill by an estimated £3bn.