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Briefing
Social security
Work

Health-related benefit cuts will deliver higher poverty, not employment

Cutting support for disabled people will increase their risk of hardship, making it even more difficult to find a decent job, particularly in parts of the country with fewer suitable vacancies.

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20 minutes

1. Introduction

The Government has proposed the largest cuts to social security since 2015. As well as reducing expenditure on health-related benefits, the Government hopes these reforms will support more disabled people into work.

But new JRF analysis identifies there are too few employment opportunities available to make this a reality. Nationwide, there is 1 vacancy for every 7 people receiving unemployment or incapacity benefits, with just 1 disability-confident job advert for every 121 people receiving incapacity benefits. This rises to 1:333 in ex-industrial areas.

Cuts to benefits can’t ‘incentivise’ people into jobs that don’t exist. Instead, with 350,000 households set to lose more than 30% of their income, they risking pushing many of the most vulnerable in our society further into poverty, and further from the labour market.

Recommendations

  • The proposed cuts to health-related benefits should be scrapped, while some of the proposals that improve the system outlined in the Pathways to Work Green Paper – including investing in employment support, introducing Right to Try, and increasing the standard allowance of Universal Credit – should be retained as a downpayment towards a better social security system.
  • Continue reforming jobcentres and work with local government and employers to build stronger, more inclusive local labour markets, including increasing the availability of disability-confident, homeworking, and flexible working roles.

2. Very few disabled people impacted by these cuts will find a decent job

In cutting around £6.5 billion from social security for disabled people and carers by 2029/30, the Government’s stated intention is to slow the rising caseloads of incapacity and disability benefits, while also increasing the employment of disabled people. The Government’s employment argument is that by weakening the income safety net, while increasing funding for employment support, far more people with a disability or health-condition will be motivated to find work. When paired with the welcome but small increase to the basic rate of support, this will in some cases, according to the Government, offset the financial losses of those impacted by the cuts.

Despite the importance of the purported employment effects, no official modelling of the labour market impacts has yet been published. This is a significant omission. A reasonable upper limit, published by the Learning and Work Institute and the Resolution Foundation, estimates that 105,000 people will find work (Resolution Foundation, 2025) – just 3% of those affected by the cuts over the course of this parliament. This briefing explores how even this low estimate will likely be tapered by the scarring effects of poverty and the weakness of local labour markets in some of the places most likely to be impacted by the cuts.

3. Improving employment support is welcome

The Government is right to target additional employment support resources towards people who are receiving either Personal Independence Payments (PIP) or the health-components of Universal Credit (UC-Health/UC-H).1 Already, 200,000 people in receipt of UC-H or PIP could work now with the right support (DWP, 2025) with another million seeing themselves working in the future if their health improves. Supporting people who are ready to find work into a decent job can improve health outcomes (The Health Foundation, 2024) and provide long-term economic security to families. In reducing the disability employment gap – currently at 28% (DWP, 2025) – expenditure on incapacity benefits will reduce over the short- to medium-term, with long-term reductions in disability benefits also possible.

So with 2 in 10 out-of-work disabled people saying they want to work, yet only about half this number receiving guidance towards finding a suitable role (Learning and Work Institute, 2025), the increased funding for employment support is highly welcome. The Government’s plan will invest an additional £1 billion per year in employment support (DWP, 2025) by the end of the Parliament. Also welcome is the attempt to de-risk the trialling of work, by legislating that trying work will not trigger a review of a PIP award or work capability assessment (WCA) outcome (although such a guarantee needs to go much further to be truly effective) (Porter, 2024).

These positives are boosted by the end to the DWP’s ABC – ‘any job, better job, career’ – approach (Elgot, 2025) to employment support which pushes people into low-quality work. Where this leads to people out of work finding the right job faster, the gains will be shared both by them and Government (Tims, 2024).

It is, however, important not to lose sight of what the investment in employment support can realistically achieve. An evaluation of past employment support programmes (Learning and Work Institute, 2025) has found the new investment spent by 2029/30 is likely to support about 23,000-48,000 more disabled people into work.2

4. Employment evidence is mixed, but cuts will create further hardship

In isolation, the improvements to employment support and engagement with the DWP should reduce incapacity caseloads without creating additional hardship. However, these reforms will be fundamentally undermined by the cuts put forward in the UC and PIP Bill (UK Parliamet, 2025).

Cuts will drive up poverty and undermine labour market impacts

When considering the effect on employment of changes in social security, the evidence is mixed. Improved work-incentives are often used as justification for welfare cuts, but the scarring effects of poverty are rarely, if ever, accounted for. The incentive to participate in the labour market or progress when working is theoretically increased when social security is cut. This is the Government’s argument, which has been utilised for past employment projections. There is some truth to this argument (IFS, 2013), but the strength of the impact will vary significantly depending on who is impacted, the relative strength of the income safety net, and the economic context.

This work-incentive argument was also the justification for previous cuts to UC-Health in 2017, despite an independent review prior to implementation concluding that there was 'no relevant evidence … that reducing the payment would incentivise people to seek work’ (Lowe et al., 2015). There has to date been no published assessment of the impact of these past cuts.

This matters, because the evidence on work-incentives in the UK is, for the most part, not applicable to disabled people. However, recent research suggests that cuts to social security offer weak work incentives for disabled people. Analysis which factors in disability offers a sensible ballpark for where the Office for Budget Responsibility (OBR) may land in the Autumn when they deliver their official projection. Modelling informed primarily by reforms to disability benefits in Norway, the Netherlands, and Spain suggests the cuts might lead to between 38,000 and 57,000 more people in paid work (Resolution Foundation, 2025) by 2029/30. This is significantly lower than the more than 3 million people who will lose from these reforms. And even for those that do find work, many could be worse off if they are unable to find good quality roles (Citizens Advice, 2025).

The incentives argument should not be entirely disregarded – there will likely be a small number of people that look for work because of the large cuts to their support. But what is missing is the consideration of the negative impacts of an inadequate household income and the additional barriers to good work that it creates, as well as the likelihood of success in finding appropriate work.

The evidence shows that finding work is more challenging when struggling to afford the essentials (Porter and Johnson-Hunter, 2025). People struggle to meet the upfront costs associated with finding work, like childcare or travelling to interviews, while finding a role is more time-consuming without reliable access to the internet. They’re also unable to invest in the education or accreditation necessary to take on some roles, such as accreditation in construction, criminal reference checks in care or insurance to be a taxi or private-hire driver. These cuts will create more of these barriers.

I’ve had to give up driving so that’s affected job prospects and things like that. The cost of buses has gone up again so it’s even harder for me to... get to interviews because it takes money out of the pot for the house.

Participant in a study (Department for Work and Pensions, 2014)

Hardship also restricts mental bandwidth, adding to job-hunting challenges, and increases stress and anxiety, leading to worsening mental health. The more permanent these experiences of scarcity become, the greater the negative impact on employment.

My brain is on fire all the time, and that’s all just through the pressure of life, really I can’t look beyond today. I’m treading water. My head is just above the water at the moment. Just above. It is a struggle.

Participant in a study (Independent Food Aid Network and JRF, 2022)

Cuts will deepen poverty and destitution for people with a health-condition or disability

Understanding existing experiences of hardship are vital in projecting the labour market outcomes of these cuts. This section shows that these cuts will disproportionately impact poorer households, where adults are already most at risk of the scarring effects of poverty set out above.

More than 1 in 3 households (35%) receiving PIP already cannot afford enough food, a warm home, or to keep up with their bills.3 This rises to 55% where someone is receiving both PIP and Limited Capability for Work-Related Activity (LCWRA), the element of UC-H that provides additional income for new claimants. Both are far above the 11% for households not in receipt of either UC or PIP.

These experiences of hardship will worsen due to the cuts and there is a significant risk that many of those impacted, who are amongst the poorest people in society, will be pushed further away from the labour market.

The hardship experienced by disabled people is driven in part by the greater cost of living they face due to their disability (Scope, 2024). These are essential expenses not experienced by people who are not disabled, which disability benefits like PIP alleviate. They vary according to individual circumstances and health condition, but are vital in how we determine living standards, especially with regard to these cuts. If we include disability benefits when calculating the income of a family then we overstate the disposable income of disabled people, making them look better off than they are. It is therefore important to compare like for like.4

Once the additional cost of disability is accounted for, 53% of the Bill cuts impact the poorest 20% of households (Figure 1a). This includes any gain from the increase to the standard allowance in UC, but is prior to any employment impacts. If the additional costs are ignored, this reduces to 24%. The average loss for households affected by the cuts is £2,100 per year, but approaching at least 350,000 (around 1 in 7 of those losing support are set to lose more than 30% of their income after housing and disability costs: 90% of these households are in the poorest 20% of households (Figure 1b).

5. Cuts will push disabled people into a weak, unsupportive labour market

The UK’s labour market is cooling. Unemployment continues to creep upwards (Office for National Statistics, 2025), and there are now twice as many people searching for work on UC (1.5 million) as there are vacancies (740,000).5 The Government is banking on this weakening labour market being strong enough to accommodate people that are impacted by the cuts. But our research finds that there are too few roles available, with strong regional disparities that will be difficult to address quickly. Instead, disabled people in some of the hardest hit places, particularly ex-industrial and coastal towns, will experience the greatest competition for jobs, with far too few employers ready to hire and support staff with a disability or health-condition.

There aren’t enough vacancies in places that need them most

The number of vacancies has steadily declined since the post-pandemic peak in the first half of 2022, with fewer vacancies available now than on the eve of the pandemic (Figure 2). While other nations have also experienced a long decline from their post-pandemic peaks, France, Germany, and the United States all report more vacancies than before the pandemic.

Poverty and hardship can make it harder to find work, but a lack of the right jobs, in the right places, also presents a significant challenge to the Government’s employment goals. This is the same challenge that past Governments have failed to address as they have too often focused only on welfare reform, rather than structural improvements to the labour markets that need it most.

Where an area has a greater demand for labour, there is less competition for roles. In the affluent commuter belt, comprised of towns like Winchester and Woking, there was 1 job advertised for every 2.5 people in receipt of UC and either searching for work or unable to work due to health conditions (Figure 3).6 Rural and semi-rural Britain follow with 3.6 and 4.2 vacancies per person out-of-work, with other traditionally affluent places like East Hampshire and South Cambridgeshire having on average 4.8 roles available. This stands in stark contrast to coastal towns – places like Neath Port Talbot, Dundee and Wyre – and former industrial areas including Mansfield, Blackburn, and Middlesbrough. Here there are approximately 15 people out-of-work on UC per available role. A list of the results by region can be found in the Appendix.

Given the unequal geographic impact of these cuts (Farnworth, 2025) it is deeply concerning that we see such wide variations throughout the country. Indeed, at the extremes of this comparison are places like Winchester and Blackburn.

Where Winchester had on average 2,900 vacancies per month in 2024/25, Blackburn had just 600. Yet the latter had 3 times the number of people out-of-work (16,300 compared to 5,100), of which 12,700 were in receipt of UC-H. Undoubtably, Blackburn and other towns like it will be hardest hit by the cuts. Yet those losing out in Blackburn will find it substantially more difficult to find a job, facing greater competition with their neighbours for each role compared to more prosperous parts of the country.

Employers in ex-industrial and coastal communities are less likely to employ disabled staff

Not only is more required from Government and industry to ensure that there are enough jobs in the right areas, but more is also required to level the playing field for disabled people as they look for and take-up work.

Just as there is no single experience of disability, there can be no single definition of what might make a job suitable for someone with a disability. However, according to research by Work Foundation (Carson et al., 2025), for 85% of disabled workers, access to remote and hybrid work is essential or very important when looking for a new role. Remote working is particularly important – 80% of disabled people in fully remote roles report that working from home had a positive impact on their health, but this drops to just 38% for those who work remotely less than half the time. Additionally, nearly 1 in 3 disabled workers who are already working in a hybrid format want to spend more of their work time at home.

According to Adzuna data, there were on average 800,000 vacancies each month in Great Britain in 2024/25. Of these, 240,000 could be considered flexible, where the job advert is categorised as either remote, hybrid, flexible, or disability confident. This is a reduction from the 2021/22 peak of 360,000 per month, when the average number of vacancies in a given month was 1.7 million, but still above 2019/20 (150,000).

The number of employers signed up to the Disability Confident Employer scheme (DWP, 2014) is another relevant metric, and one that can be observed at a local level. While classification as a disability employer does not always translate to the hiring of disabled people (Pring, 2023), nor does it guarantee reasonable adjustments will be made by every registered employer, when viewed across a geography, it is a useful indication of the readiness of local employers to employ, support, and retain disabled staff.

The prevalence of ‘disability confident’ in job adverts has risen in recent years, despite the total number of vacancies declining. In 2019/20, 200,000 roles (1.3%) were classed as disability confident, rising to 540,000 (4.4%) in 2023/24. The last financial year saw a decline in the number of roles (420,000), but this was still 4.3% of total jobs.

In 2024/25, for every job advertised as disability confident nationwide, there were 100 people in receipt of UC-H. To ensure as many disabled people as possible are presented with the opportunity of finding a decent job, a greater proportion of these roles need to be based in parts of the country with higher UC-H caseloads. But instead, the local disparities apparent in total vacancies are amplified for disability-confident job adverts.

Once again, we observe substantial variation by type of local labour market. It is the affluent commuter belt (1:47), remote rural communities (1:72), traditionally affluent towns (1:73), and semi-rural Britain (1:77) that have a better than average ratio of disability-confident roles to people in receipt of incapacity benefits. (London and inner cities are not mentioned here but are presented in Figure 4 for completeness. As in note 6, local authority comparisons are less relevant in metropolitan areas.) Areas of industrial decline have the fewest employers proactively seeking to hire disabled staff, with ratios of 1:354 and 1:242 in urban industrial legacy and industrial retirement respectively.

Someone losing from these cuts in one of these towns will find it much more difficult to find work with an employer that is already looking to hire and support disabled staff. This means less chance of reasonable adjustments being made to the role and less flexibility for someone to manage their health-condition or disability. The result is a greater likelihood of being stuck on, or moving back onto, out-of-work benefits.

6. Conclusion

The Government’s hoped for increase in employment cannot be commensurate to such deeply regressive cuts. Rather, if projections (Trussell Trust, 2025) of an additional 440,000 people in disabled households being forced into severe hardship and at risk of needing a food bank in 2029/30 become reality, these reforms will likely be looked back upon as a disastrous method by which the Government will have impoverished the very people it aims to help into work.

The Government must therefore change course, cancelling the proposed cuts and investing in places and methods (Porter, 2024) to increase the employment of disabled people. This includes continuing to reform jobcentre culture, practice and support, improving population health and healthcare, and restructuring the labour market so jobs are designed to be much more viable for disabled people and more supportive when employees become ill, including through the Mayfield Review (DWP and DBT, 2025).

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