Under-25s to Lose Sickness and Disability Benefits in Radical Welfare Overhaul, Milburn Review to Say

Young people under the age of 25 could lose access to the two main sickness and disability benefits under a radical overhaul of the welfare system set to be recommended by former Labour health secretary Alan Milburn.

His government-commissioned review, due to be published on Tuesday 17 November, would move 18 to 24-year-olds off the health element of Universal Credit and Personal Independence Payment, known as PIP, and replace them with a new Youth Allowance paid at the standard rate of Universal Credit. Milburn has already admitted the changes would not be “pain-free”, and many young claimants would receive less money than they do today.

What the review recommends

Under the proposals, first reported by the Times and the BBC, under-25s would no longer be able to claim the health element of Universal Credit or PIP. Instead, they would receive a Youth Allowance at the same basic rate as standard Universal Credit.

A separate Additional Cost Allowance would be available to help some young people meet the extra costs linked to their disability or long-term health condition, covering support such as assistance, mobility, specialist transport and daily living costs. But the new allowance would go to a smaller group than the 453,000 young people who currently claim PIP, and only those with significant, well-established and ongoing costs would qualify.

The review is also expected to recommend billions of pounds of new investment in employment support, including work placements, job subsidies and one-to-one personal advisers, as part of a drive to get more young people into work. His interim report concluded that the current system spends 25 pounds on benefits for every 1 pound spent on employment support.

Who would be protected

The most severely disabled young people would be protected under the plans. Those with profound and lifelong conditions who can never reasonably be expected to work would receive a separate benefit paid at a higher rate.

Milburn has been open that some young people will receive less money under the proposed arrangements, particularly at the beginning of their claims. The review makes recommendations to the government rather than introducing changes itself, and key questions remain unanswered, including the precise eligibility rules, transitional arrangements and protections for existing claimants.

Why the overhaul is being proposed

The review was commissioned to tackle the growing number of young people not in education, employment or training, known as NEETs. Official figures show just under one million 18 to 24-year-olds fall into this group, around one in eight of the age group, a rise of 3% on the same period last year.

The changes would go further than any welfare reform attempted since the introduction of Universal Credit in 2013. The government is expected to take the recommendations forward into legislation in the new year, and Prime Minister Andy Burnham is likely to back them, although the proposals are expected to prove controversial.

The proposals come after a previous attempt at welfare reform last summer ran into a major backbench revolt, which heavily watered down the proposed benefit cuts. The recommendations also have particular implications for Scotland, where responsibility for welfare benefits is divided between Westminster and Holyrood. Milburn, a Labour MP from 1992 to 2010, spent a year working on the review, which was commissioned to find new ways of helping young people into work.

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Featured image: The Palace of Westminster in London (Wikimedia Commons).