Benefits Claimants Could Receive £25,000 Pounds More Than Full Time Workers Says Think Tank Report

Fresh analysis reveals that individuals receiving sickness benefits could potentially take home more than workers earning minimum wage, sparking renewed debate about Britain’s welfare system. The Centre for Social Justice (CSJ) has calculated that benefit claimants receiving universal credit incapacity benefits, personal independence payments (PIP), and housing benefit could accumulate an annual income of £25,000, surpassing the £22,500 post-tax earnings of nearly two million workers on the national living wage.

The Conservative leader, Kemi Badenoch, is set to deliver a stark warning that the United Kingdom risks becoming “a welfare state with an economy attached.” The CSJ’s findings highlight that claimants who additionally receive disabled child and carer’s allowance could reach an income of £37,000, significantly exceeding potential employment earnings.

Joe Shalam, policy director at the CSJ, acknowledges ministerial efforts to address what he terms “perverse incentives” within the post-Covid welfare system. However, he emphasises that the current structure continues to trap numerous individuals in a “cycle of dependency and wasted potential.”

Labour MPs have shown considerable resistance to proposed welfare reforms, with 47 members voting against the recently watered-down benefits bill. This represents the second-largest revolt the government has faced, following closely behind last week’s opposition from 49 Labour MPs.

The government’s strategy includes plans to ban foreign nationals from claiming benefits, with Badenoch criticising the current £1 billion monthly expenditure on benefits for non-British citizens. Ministers are grappling with finding £3.5 billion in funding following U-turns on disability benefits and winter fuel payments for pensioners.

Sir Stephen Timms, the disability minister, has acknowledged the urgent need for reform to address “severe work disincentives in universal credit.” A comprehensive review of disability benefits is planned, with assurances that disabled individuals with lived and professional experience will constitute the majority of the review group.