A Radical Restructuring of Disability Payments
The Institute for Fiscal Studies has urged the Department for Work and Pensions to replace the current Personal Independence Payment structure with a “pounds-for-points” system, a reform that modelling suggests would reduce the daily living component by more than £500 per year for 55% of existing claimants.
The IFS published its recommendations amid growing concern that the present threshold-based design creates a blunt, inequitable distribution of support. Under the current framework, claimants who score just above a qualifying points threshold receive the same cash award as those with significantly higher scores — a structural anomaly the IFS argues distorts both fairness and incentives.
What the Modelling Shows
The picture for the mobility component is similarly mixed. Around a third of claimants would gain more than £1,000 per year, but nearly half would lose out — and almost all of those losers would forfeit more than £500 annually.
The Incentive Problem
The IFS is candid about the behavioural complications a linear model would introduce. It acknowledges that the sharp financial cliff-edge between the 8–11 and 12-point bands currently gives claimants a strong incentive to cross that threshold. A continuous scale would soften that particular distortion. Yet it would simultaneously strengthen the incentive for claimants to accumulate points within any given range.
As the IFS notes directly: “The incentive to move from 8–11 to 12 points would be weakened as this would no longer lead to a sharp rise in support, while the incentive to increase points within the 8–11 or 12+ ranges would be strengthened.” Claimants, the IFS accepts, are likely to respond — by submitting more evidence or challenging awards more frequently. Because these incentives push in opposing directions, the IFS concedes that the overall fiscal effect remains ambiguous.
Why Losers Outnumber Winners
The asymmetry between winners and losers is not arbitrary. It reflects a fundamental feature of the current claimant population. A minority of claimants hold a very large number of points; the majority cluster closer to the qualifying thresholds. A linear system redistributes support upward toward high-scorers, benefiting fewer people by larger amounts while trimming awards for a broader base of claimants with modest scores. The IFS frames this plainly: there are fewer large winners than smaller losers precisely because high-point claimants represent a minority of the total caseload.
The DWP has yet to formally respond to the IFS recommendations. Any move toward a points-proportional model would represent one of the most significant structural changes to PIP since the benefit replaced Disability Living Allowance in 2013.