Disability benefit for under-25s may be axed under welfare overhaul

Ministers are considering scrapping a key disability benefit for people under 25 as part of sweeping welfare changes, the Guardian has learned. The plan would remove the health element of universal credit for claimants in that age group and replace it with a multibillion-pound package of support to help them into work.

Whitehall sources said the package under debate is much bigger than previously thought, and could even apply to existing claimants, not just new ones. The changes would include subsidised jobs, targeted back-to-work schemes, and mental health support for the one million 16- to 24-year-olds not in education, employment or training (Neets).

But the move is fraught with political danger. Last year, Labour MPs staged a dramatic rebellion over welfare cuts, and ministers have spent weeks trying to convince them the plans are about reform. A government source said: “We will be bringing forward a comprehensive package of support and reform to tackle the scandal of a million young people not in education, employment or training. The details are yet to be decided, but we are committed to enabling work and opportunity, while always protecting those unable to work.”

Details of the proposed changes

The health element of universal credit, already almost halved to £217 a month, would be removed for under-25s under the central option. Those with the most severe disabilities would not lose any money. Officials are also looking at a separate regime for under-25s within the replacement for personal independence payment (Pip), which is claimed by four million people. Under that plan, younger claimants could see reduced or withdrawn entitlements, though again, the most severely disabled would be protected.

Officials have studied Denmark’s system, which restricts access to its disability pension for under-40s and instead offers flexible jobs and training. A bill encompassing these changes could be presented in the next parliamentary session.

Political and public reaction

Work and pensions secretary Pat McFadden has called welfare reform a “moral crusade”, saying too many young people are stuck on benefits for too long. But charities warn that cutting support could push vulnerable youngsters deeper into poverty. Disability charity Scope estimates about half of households with an under-22 receiving the universal credit health element are already in poverty, and that could rise to more than nine in ten if the support is removed.

Lucy Schonegevel of Action for Children said: “We are deeply concerned by reports that disability benefits for under-25s could be cut. If confirmed, that would be at odds with the prime minister’s recent warning against ‘crude cuts’ … Serious investment in high quality, tailored employment support is vital, but employment support alone cannot overcome a lack of jobs.”

Andy Burnham’s government hopes to persuade more people back into work, but the scale of the plans could reignite concerns among Labour MPs. Conservative leader Kemi Badenoch has proposed banning under-25s from claiming benefits unless they have six months of continuous employment, while Reform UK wants to cut the welfare bill by £50bn.