The Cost of Disability Benefits

This week the BBC reported that the annual bill for Personal Independence Payments (PIP) - a form of disability benefit - could soar over the next decade to £10.5 billion, an increase of 75% from this year's annual bill.

Disability benefits cost could rocket, report says (BBC News)

Who gets PIP?

PIP is additional money (additional to income and other benefits such as Employment and Support Allowance) that is paid to eligible individuals that have an illness, disability or mental health condition, to help them with their everyday lives.

The main eligibility rules are that the individual must find it hard to do everyday tasks or get around because of a physical or mental condition. They must have found these things hard for 3 months and expect them to continue to be hard for another 9 months.

You must be over the age of 16 to make a claim and you cannot make a new claim for PIP after you reach retirement age. However, if you commenced PIP payments prior to retirement you are entitled to continue receiving them after the age of 66.

Read more on the Citizens Advice website: Personal Independence Payment

Why is the forecast for pensioners receiving PIP in 2033 so high?

There is a growing number of people of working age unable to work due to sickness, disability and mental health conditions. Individuals in their 50s now are seeing increasing rates of heart disease, type 2 diabetes, back pain and mental health issues - these are the pensioners of the future. Today 1 million pensioners receive PIP payments, by 2033 this could rise to 1.6 million.

How could the PIP bill be reduced?

The key to reducing all claims for long-term sickness benefit is to address the long-term sickness directly.

This can be done through preventative health measures (preventing ill health from occurring), which includes health education and awareness, for example stop smoking campaigns and healthy eating guidance.

It also requires better identification of those at risk, for example through NHS screening programmes. It also requires improvements to be made to the treatment and management of physical and mental health conditions, to reduce their severity and length of time that an individual remains unwell.