Money Wellness

benefits

Published 15 Jul 2026

3 min read

Are new welfare reform plans on the way?

It’s just over a year since the government backed down on plans to tighten eligibility for sickness and disability benefits and how they work.

Are new welfare reform plans on the way?
James Glynn - Money Wellness

Written by: James Glynn

Senior financial content writer

Published: 15 July 2026

But it’s nevertheless continued pushing the case for reforming welfare, and just last week, a review into personal independence payments (PIP) found that the current system isn’t working as intended for some disabled people.

Speaking to the Guardian today, work and pensions secretary Pat McFadden has stressed that for people unable to work, the welfare system “must always be there for them”.

However, he stated that for those “who could work or could change their situation, then we’ve got to help them do that”.

Changing the nature of welfare

Mr McFadden’s comments suggest we could be about to see a renewed push to help people with health conditions off benefits and into employment.

He said: “It’s my job to put together a plan, a proposal, [that] changes the question of the welfare state from simply asking ‘what benefits are you entitled to?’ to asking ‘how can we help you live the fullest life?’”

“I don’t believe government fulfils its responsibilities simply by writing a cheque.

“I think we owe people more than that.”

Of course, you might remember that the government had to back down on its proposed welfare reforms because of strong opposition from Labour MPs.

Incoming prime minister Andy Burnham has already said his government would “reduce the welfare bill in a way which is fair and lasting”.

But he’ll certainly be aware that he’ll have to get his own party on board with any reforms before they can possibly be introduced.

Needless to say, we’ll be keeping a close eye on developments so you know what changes - if any - are coming, and what they might mean for you.

100,000 people with health issues getting employment support

Mr McFadden was speaking after the government confirmed that 100,000 disabled people and those with health conditions who are claiming out-of-work benefits are receiving employment support.

The Pathways to Work scheme offers free, voluntary and personalised help for those assessed as having limited capability for work and work-related activity (LCWRA). 

“You have to invest in the support,” he said. 

“In the past, people have been signed off [on benefits] and written off. 

“That has often led to people feeling isolated, depressed, their condition becoming worse, not better.”

Government figures suggest that people who take part are 40% more likely than non-participants to be in work after two years.

This, it says, is evidence that the programme is making a “meaningful and lasting difference to people’s lives, prospects and helping get the wider economy firing on all cylinders”. 

Disabled people can work without fear of losing benefits

The government has already taken one important step to encourage people back into work if they’re able to do so.

According to the Department for Work and Pensions, more than a third of disabled people and those with health conditions (37%) want to work, but the fear of having their benefits stopped is holding them back.

So the law has changed to remove this obstacle, which means disabled people who claim benefits can now try work without having to worry about losing the support they’re getting.

Under the new system, getting a job won’t automatically trigger benefit reassessment if you’re on:

People who want to volunteer will also be able to do so without fear of having their benefits looked at.

James Glynn - Money Wellness

Written by: James Glynn

Senior financial content writer

James has spent almost 20 years writing news articles, guides and features, with a strong focus on the legal and financial services sectors.

Published: 15 July 2026

The information in this post was correct at the time of publishing. Please check when it was written, as information can go out of date over time.

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James Glynn - Money Wellness

Written by: James Glynn

Senior financial content writer

Published: 15 July 2026

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