The first-ever increase in disability claims following the lockdown will see Britain’s benefits bill for working age reach £100bn this year.
According to the Department for Work and Pensions’ (DWP) forecasts, the cost of welfare payments, including universal credit and housing subsidies, is expected to increase by 30pc real to £130bn at the end of this decade.
Payments jumped by 20pc the year following the 2020 lockdown. They went from £78.9bn up to £95.6bn for 2020-21, due to a spike in claims relating to mental health or muscular pain.
The crisis of worklessness in Britain is a result of official figures released this week, which revealed that an unprecedented 2.8 million people do not even look for work due to their claim that they are too sick.
Tom Waters, at the Institute for Fiscal Studies, said that the rise was due to the rising cost of living, housing benefits, and disability claims.
He said: “Before this pandemic, each month around 20,000 people would be added to disability benefits.” Now, it is about 40,000. It has doubled and shows no signs of slowing.
The DWP predicts that the cost of disability benefits for people of working age will increase by 27pc, in real terms, from £61.5bn to £78.2bn at the end of this decade.
Mr Waters stated: “We really don’t have a good idea why the number of disability benefits is increasing so quickly. It is very worrying if it shows that the health of our country is deteriorating. Even if there are other reasons for it, it puts a lot pressure on the government’s finances.”
David Miles is an executive member at the Office for Budget Responsibility. He has warned Rishi Sunder to rein in welfare spending, and to get more people to work rather than relying on immigration to control Britain’s debts.
According to the Office for National Statistics, there are 9.25million people between 16 and 65 who are neither working nor seeking work. This figure was revised upwards by 400,000 this week.
The tax and spending watchdog estimates that the percentage of working-age people reporting a disability has increased by 36pc in the last decade . Meanwhile, the percentage of those receiving a health-related or disability benefit has increased by 40%.
According to the OBR, by 2027 it is expected that one in eight working-age people will receive some form of health benefit.
The number of people who claim Personal Independence Payments (available to both people in and out-of-work) has risen dramatically since 2020. In October 2023, the number of claims for mental disorders like anxiety and depression grew by over 50pc.
The figures released by the DWP do not include benefit payments administered by HMRC, such as child benefit and tax credits. These are expected to add an additional £20bn in costs for the taxpayer this year.
According to a government source, the government is taking steps to reduce the cost of benefits.
Source: “Yes, I believe we have helped people get through the major crisis of cost-of-living. We are pushing the most ambitious welfare program in the last decade. We’re tackling the problem of long-term illness head on and helping thousands get back to work.
“These reforms reduce the benefit bill while Labour’s one serious welfare proposal is to soften benefit sanctions, at a cost £2bn over a Parliament.”
Waters said that crackdowns in the past on benefits had not always worked.
He said: “It’s fair to say these types of reforms, to try and reduce disability benefits bills in the past, have not often saved as much as the government had hoped.”
“People find ways to qualify in other ways.” You can get benefits through a points system, but they may limit how many points you receive for certain types of disability. If you can prove that you are disabled in a different way, you may still be able get on.”
A government spokesperson said: “With four million more people working since 2010, our welfare changes are going further. We have reduced by over half the number of people receiving the highest level health benefits.
Our Back to Work Plan is designed to help more than a million people, including those with disabilities or long-term illnesses, get and stay employed, while we continue to reduce inflation, lower taxes, and grow the economy.