Finance

PIP Beneficiaries Face £975 Income Gap as Payments Are Replaced with Vouchers – Report Says

By Ehsteem Arif

Published on: July 7, 2024

The UK Government’s proposed changes to the Personal Independence Payment (PIP) have sparked significant concern among claimants and advocacy groups. These changes could replace cash payments with vouchers, creating substantial financial gaps for disabled individuals.

Currently, PIP provides up to £737 per month to help cover the additional costs associated with disability. However, the new proposal could replace ongoing cash payments with vouchers and grants, especially for purchasing equipment and treatments. Critics argue that this shift could create a substantial income gap for incapacitated individuals.

Contents

• 1 Financial Impact
  • 1.1 Scope Report Findings
• 2 Reason for Voucher System
• 3 Voucher System
  • 3.1 Key Issues
• 4 Rising PIP Claims
  • 4.1 FAQs
  • 4.2 What is the proposed change to PIP payments?
  • 4.3 How much does a disabled household need to maintain living standards?
  • 4.4 Why is the voucher system controversial?
  • 4.5 How many people currently claim PIP?
  • 4.6 What are campaigners’ main concerns?

Financial Impact

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A study by Scope, titled the Disability Price Tag, highlights that households with disabled members require an extra £975 per month to maintain the same living standards as non-disabled households. This amounts to around £11,700 per year, reflecting the additional costs disabled individuals face for necessities like adaptive equipment, therapies, and daily living expenses.

Scope Report Findings

Mike Adams, CEO of disability organization and founder of EnableAll, emphasizes the diverse and significant costs associated with disability. These costs extend beyond mobility aids, affecting everyday expenses such as accessible accommodation during travel, higher insurance premiums, and specialized delivery services.

Expense Type	Additional Monthly Cost
Adaptive Equipment	£200
Therapies	£300
Daily Living Expenses	£475
Total Additional Cost	£975

Reason for Voucher System

The Government claims that switching to a voucher system will save money and streamline claims. However, this shift could make life harder for disabled individuals, adding more paperwork to an already complex system. The Work and Pensions Secretary, Mel Stride, mistakenly suggested that people receive thousands of pounds per month in benefits, which he later corrected to annually. This miscommunication can mislead public perception of the ease of obtaining benefits.

Voucher System

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Allowing the disabled to claim only specific costs could hurt many individuals. They might not have extra money to pay upfront and wait for reimbursement. This could cause significant problems as most PIP claimants use the funds to pay for rent and bills. Studies show disabled households need £975 more each month to live comparably to non-disabled ones.

Key Issues

1. Upfront Costs: Many disabled individuals might not have the funds to cover upfront costs.
2. Flexibility: Cash payments provide flexibility to address unforeseen and immediate needs.
3. Independence: Vouchers might not cover all expenses, reducing financial independence.
4. Administrative Burden: Additional paperwork could complicate an already difficult system.
5. Miscommunication: Government misstatements can mislead public understanding of the benefits system.

Rising PIP Claims

Around 2.6 million people claim PIP, with 33,000 new claims made monthly, double the rate before the COVID-19 pandemic. Almost a quarter of UK adults have a health issue or disability, and government spending on benefits could increase by 63 percent over five years. Moreover, accessibility to online shopping platforms remains a significant concern.

Campaigners stress that cash payments are necessary because they offer flexibility to address unforeseen and immediate needs that arise due to disability. They argue that vouchers and grants might not be sufficient to cover unpredictable expenses or provide the independence that cash payouts offer. The government aims to control costs with the proposed PIP reforms, but critics argue that these changes could widen the financial gap for disabled individuals, impacting their ability to maintain independence and meet essential needs effectively.