Official forecasts indicate that Britain will continue to pay a record £30bn a year in benefits to those who don’t have to work, even after Rishi Sundera’s welfare reform.
By the end of this decade, the amount of disability benefits paid out to people that do not need to find employment will rise from approximately £29bn up to as much as £31bn. This is due to the fact that many people claim for mental health issues.
The Department for Work and Pensions’ (DWP) projections show that payments will continue rising despite the stricter tests for fit for work and increased jobseeker assistance announced last fall to help more people find employment. Nearly 3.9 million people receive out-of work benefits without even having to look for a new job.
It is more than twice the number of people who have to try and find work. This follows an increase in mental health problems and joint pain claims during lockdown.
Downing Street is concerned about the projected increase in benefits for people of working age, as economic inactivity caused by ill health has reached new heights.
Mr Sunak highlighted that taxpayers currently pay a bill of £69bn per year to support people with disabilities or health conditions who are working-age.
This month, he said that a number of reforms will “ensure that the welfare system does not over-medicalise the everyday challenges and anxiety of life”.
The £31bn figure reflects increased welfare payments to people who receive higher rates of Universal Credit because of ill health. Around two-thirds of claimants currently state that they have mental health issues.
It is not necessary for people who receive payments to attend interviews or apply for jobs.
This includes approximately £8.6bn of Employment and Support Allowance, which is a medical benefit that has been closed for new claims.
85 % of the 1.6 millions people receiving ESA do not have to find work. DWP statistics show that around half are approved for mental and behavioural problems, the most common reason for claiming.
These benefits can be paid on top of the Personal Independence Payment (PIP), which is a means-tested benefit that is available to both people in and out-of-work. This will add £27.5bn more to the welfare bill for working-age people in 2028-29.
According to the Office for Budget Responsibility, only 16pc (or a little over 16%) of those who currently claim PIP are employed.
The government wants to abolish the so-called Work Capability Assessment, which is currently used as the main test for fit-for-work.
The figures show that the Prime Minister faces a challenge to reduce the ballooning welfare bills.
There are 9.4 million economically inactive people in the UK. Of these, 2.8 millions are not in employment or looking for work due to health issues.
Mr Sunak is looking to take reforms even further. He has announced plans to have 150,000 people who were signed off with “mild conditions” look for work.
DWP’s predictions show that the taxpayers will be on the hook for more than £100bn a yearly bill to cover health and disability benefits paid out to all ages.
The financial costs of supporting people in working age and children have increased by 50 percent.
The rise in anxiety and depression is largely due to an increase in in adults and children with behavioural disorders, learning disabilities and other problems.
A DWP spokesperson said: “We take long-term decisions in order to assist everyone who is able to work, improve lives, and grow the economy while maintaining protections to those who need them.
“Our £2.5bn back to work plan will help more than a million people overcome barriers to employment, including those with disabilities or long-term illnesses.
Our landmark welfare reforms are expected to reduce the number of people who will be placed on the highest level of incapacity benefit by more than 424,000. Instead, they will receive personalised support to move them closer to employment. Meanwhile, our Chance to Work guarantee will allow millions of people to work without having to worry about losing their benefits.