Huge DWP disability benefit changes in October Budget to save £3bn – but 1,000s could lose £5,000 a year
THOUSANDS of disabled Brits could lose up to £5,000 a year as Rachel Reeves is set to push through brutal welfare cuts.
The Chancellor is expected to slash £3bn from the welfare bill in the Budget – with £1.3bn of that coming from disability benefits.
The changes, first introduced by the Tories, will tighten access to sickness benefits through tough new rules under the Work Capability Assessment.
The Office for Budget Responsibility said the move would save £3bn over four years and the sum is already factored into Treasury spending assumptions.
But the tougher criteria could see 420,000 disabled or ill people lose vital financial support, 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.
But Work and Pensions Secretary Liz Kendall yesterday said the benefits system needs the most far-reaching reform in a generation to get millions back into work.
Her department is preparing to roll out a radical overhaul of welfare, promising a pro-work, pro-opportunity agenda.
There are 2.8 million people off work due to long-term sickess, with the cost of benefits for working age people set to reach £64bn by the end of the Parliament.
This figure will be an increase of £30bn on pre-pandemic levels.
Before the election, former Work and Pensions Mel Stride unveiled plans to tighten welfare rules to require an extra 400,000 people signed off long-term to go back to work.
They would automatically lose some of their benefits payments, with the hope being that they would eventually enter the workforce, cutting the welfare bill even further.
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.
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.
“We will deliver savings through our own reforms, including genuine support to help disabled people into work.”
Predictions for the Autumn Statement
The Sun’s Head of Consumer Tara Evans reveals the top predictions for the Autumn Statement:
Winter Fuel Payments
Chancellor Rachel Reeves has already announced that Winter Fuel Payments will be limited to those receiving pension credit and certain benefits. The benefit is worth up to £300 per year and currently is available to everyone over state pension age and those on certain benefits.
No rises to some taxes
Keir Starmer promised there would be no rises to National Insurance, Income Tax, Corporation Tax or VAT as part of Labour’s manifesto in the election race.
Inheritance Tax
It has been predicted that the Chancellor Racheal Reeves will make changes to inheritance tax rates or thresholds. One suggestion is the potential shortening of the gift period before death for tax exemptions.
Pensions
Pensions featured very high up in the King’s Speech, was this a hint at how high on the agenda it will feature in the budget? Experts say there are a number of options, including reintroducing the lifetime allowance cap. Ms Reeves has previously campaigned to reduce the tax relief that higher earners get on their pensions and to introduce a flat rate of 33% instead. Another possible option is changing the rules around pensions and inheritance tax.
Capital Gains Tax (CGT)
There is speculation that the £3,000 tax-free allowance could be scrapped or there may be an extension of CGT to other assets.
Business Rates
There are rumours of reforms to support small businesses, possibly basing rates on land value.
Fuel Duty
Possible rise in fuel duty, reversing the freeze since 2011 and impacting household costs. The Sun has backed drivers as part of its Keep It Down campaign since the start of 2011.