The welfare cuts announced in last week’s Spring Statement will disproportionately impact young people. IF Researcher, Toby Whelton, explains.
Spring Statement announces welfare cuts
Last week’s Spring Statement confirmed welfare benefit cuts worth £5 billion. This will be achieved by tightening the eligibility criteria for personal independence payments (PIP) as well as reducing the rate of the Universal Credit (UC) health element.
Reducing eligibility for PIP, a non-means-tested benefit paid to working-age individuals with a disability, will affect 800,000 people at a loss of £4,900 per person. Alterations to the UC health element – a top-up given to disabled and sick recipients of Universal Credit – will affect 3 million individuals each losing an average of £1,100.
The Department for Work and Pensions (DWP) estimates that the changes alone will push an additional 250,000 people into relative poverty by 2029−30, including an extra 50,000 children.
Targeting the young
That’s not all. In a paper published by DWP last week, the government announced that it is reviewing the possibility of raising the qualifying age for Universal Credit health element as well as PIP from 18 to 22. This would affect 66,000 18−21 year-olds currently receiving one or both of these benefits, while also preventing hundreds of thousands of future claimants.
This would mean that 18−21 year-olds, who are reliant on benefits, would receive just £70 a week. Enough to live on? “Absolutely not”, admitted the Pensions Minister in a recent Newsnight interview.
These proposals as well as the changes announced in the Spring Statement have revealed a flagrant disregard for young people. Once again, government policy will gut the support for the most vulnerable young in order to leave the over-generous benefits given to older generations untouched.
Two-tiered benefit system
Unfortunately, plans to increase the eligibility age for PIP and the Universal Credit health top-up to 22 are not unprecedented.
Age-based discrimination within the benefit system already exists. Currently, under-25s are entitled to £82 less a month in the UC standard allowance compared to their older counterparts while also receiving £19 less a week in Job Seekers Allowance. Under-35s living alone in privately rented accommodation are also only entitled to a lower rate of Local Housing Allowance.
It is worth noting that the cuts to the health element of UC (which does not vary by age) will partially be offset by an above inflation increase to the UC standard allowance (which does vary by age). This will further entrench existing intergenerational unfairness within the welfare system.
No inherent reason
There is no clear justification, neither moral nor economic, to up the age criteria. Age should not be a proxy for need. Benefits must be awarded to those who need them regardless of age. Why should a sick or incapacitated young adult receive less support than a sick or incapacitated older worker?
If anything, it is the young who are most in need of greater security. Research has shown that 48% of young people between the ages of 19−21 live in “financial precarity”, a far higher rate than older age groups. For young people on Universal Credit, this number is 79%. The young are the most food insecure demographic and 16−24 year-olds are twice as likely to use a foodbank than any other age group. IF’s research has shown that the poorest under-30s dedicate 77% of their expenditure to essentials alone, which is a proxy for severe poverty. This figure has risen by 21% compared to twenty years ago.
It is the young who are in the greatest need of a safety net, yet welfare support continues to be withdrawn from them.
Consequences of PIP assessment reforms
While proposals to increase the age threshold for incapacity benefits is the most blatant example of intergenerational unfairness, even the confirmed welfare cuts will fall on young people the hardest.
The Spring Statement announced that the qualifying criteria for PIP assessments will be tightened so that applicants must score at least four points in one specific daily living activity to qualify for benefits. Under the previous system, individuals could qualify by accumulating lower scores spread across multiple activities.
This will make it far harder for claimants with mental illnesses, such as depression or anxiety, to successfully apply. Already, people claiming based on mental health receive less on average.
Given young people are far more likely to claim PIP based on mental health reasons, these changes will disproportionately impact the young. In 2023−24, around 75% of PIP awards given to under-25s were based on mental health issues whereas for over-60s mental health issues accounted for under 15% of total PIP awards.
It is unlikely this is accidental as it comes days after the Health Secretary claimed there was an “overdiagnosis” of mental health issues and specifically pointed to the number of young people not in education, employment or training.
Future claimants
Lastly, the cuts to the Universal Credit health element will further target the young. The £3 billion the government hopes to save will be achieved by freezing the entitlement for current claimants at £97 a week, but for new claimants their entitlement will be halved to just £50. These changes will affect all age groups but the most vulnerable will be disabled and sick children transitioning into adulthood. By 2030, current DWP figures would suggest 80% of under-25s will be receiving only the halved rate.
Tackling the symptom, not the cause
There is a cruel irony to these punitive cuts. A key reason for the spike in benefit claims amongst the young is the mental health crisis. This can largely be attributed to the underinvestment in children and young people’s mental health support and youth services. Further cutting provisions in the form of welfare cuts will not fix the underlying cause.
Mental health support for children and young people accounts for just 1% of the NHS’s total budget yet a million children are referred to mental health services every year. The lack of funding of these services has meant that in 2022−23 a third of all mental health referrals were closed before support was accessed and another third waited over a year before receiving support. Around 40,000 children had to wait over two years before their first contact with support.
Preying on the young
There is a valid argument for welfare reform and there is a logic to rebalancing the value of out-of-work benefits compared to sickness benefits. But further dismantling the vestiges of the welfare net for the young in order the meet an arbitrary, near mystical fiscal headroom target is certainly not the answer.
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