March 18, 2025
The UK Government has announced reforms to health and disability benefits. This blog looks at how the proposals for Personal Independence Payment (PIP) could affect Scotland. PIP was devolved to the Scottish Parliament in 2020 and is being replaced over time by the Adult Disability Payment. As a devolved benefit, the Scottish Government receives funding which, broadly speaking, should meet the costs of a directly equivalent benefit in Scotland.
What changes are proposed for PIP and when will they happen?
The main reforms to PIP are not due to take effect until after April 2026, by which time it’s expected that everyone on PIP in Scotland will have transferred to the Scottish ‘version’ of PIP, Adult Disability Payment (ADP). By the end of January this year there were:
- 433,050 people receiving ADP
- 35,420 people receiving PIP
This means that the main impact will be in the level of funding available to the Scottish Government.
The main changes proposed for PIP in the green paper are:
- To make it more difficult for people with lower levels of daily care needs to qualify. Only those who score a minimum of 4 points in at least one of those ten activities will be eligible for the daily living component of PIP. It will still be necessary to score 8 points in total. This is due to apply from 2026/27.
- Modernising the PIP assessment, including re-introducing more face to face assessments. Timing TBC.
- Using receipt of PIP as the gateway to qualifying for the health related addition in Universal Credit, replacing the Work Capability Assessment (WCA). Due to apply from 2028/29.
- Raising the age for qualifying for PIP to 18. Timing TBC.
The Scottish Government ruled out similar changes to ADP
The Cabinet Secretary for Social Justice, Shirley-Anne Somerville has ruled out cuts to disability benefits in Scotland. On 6 March she told the Social Justice and Social Security Committee that:
The Scottish Government has no intention to change its approach to Child Disability Payment and ADP. We worked very hard with people who were on Disability Living Allowance and PIP to make the changes that we made, and I know that people wish us to go further with changes. We do not intend to follow Westminster’s approach, because that would be exceptionally detrimental to people who receive those payments and are entitled to them. Clearly, if there were implications for the Scottish Government’s budget, we would need to consider those at the time and work out our strategy for dealing with them, but we would not do that on the back of disabled people.” (SJSS Cttee, OR, col 12, 06 March 2025)
There is an independent review of ADP due to report to Ministers in July. The remit includes reflecting on the first year of delivery, considering the qualifying criteria and looking at potential improvements to processes. However the starting point is not about reducing spending. Instead, the review will:
“place particular emphasis on reviewing and improving the eligibility criteria. The aim is to ensure that the criteria are not only transparent and fair but also inclusive, ensuring that they reflect the diversity of disabled people’s circumstances and needs.” (ADP review, interim report)
So if these reforms to PIP are unlikely to affect anyone directly in Scotland – what’s the issue? There are two:
- If spending on PIP falls, the amount of funding provided to the Scottish Government through the block grant adjustment (BGA) falls by a similar proportion.
- If PIP becomes the gateway to Universal Credit health element in England and Wales, will ADP take on this function in Scotland?
Budget implications for Scotland
From the introduction of ADP in 2022 it has been expected that it would cost more than continuing with PIP in Scotland. This reflects a very deliberate policy of administering the benefit in a different way.
As the chart below shows, the Scottish Fiscal Commission forecast in December 2024 that, by the end of the decade, the Scottish Government would be spending around £381 million more on ADP than it receives in funding through the block grant adjustment for PIP. Although that shortfall is a significant amount of money, it is only a small proportion of the total spent on ADP. These forecasts do not take account on the proposals for changes to PIP in England and Wales.
If PIP spending is forecast to fall – or to increase more slowly – and if ADP stays the same then the gap between the BGA and actual spend gets bigger. Quite how much bigger will become slightly clearer once the scale of forecast savings from the PIP reforms are set out in the Spring Statement on 26 March. Things will become much clearer once the SFC publish their updated forecasts in May and the revised forecasts for BGAs are available.
Forecasts are always uncertain, and previous reforms have not tended to deliver the scale of expected savings.
The BGA is based on the Office of Budget Responsibility’s forecasts but is then later reconciled to reflect the actual spending on PIP. In other words, if the reforms deliver lower savings than expected, then that money will return to the Scottish Government in a future year’s budget.
Lots of uncertainty
The spending forecasts for ADP have had a high degree of uncertainty – because it is a new benefit and because it is difficult to assess what difference the ethos of Social Security Scotland will have. After two years of delivery, ADP spending might be becoming easier to forecast in the light of experience, but the reforms to PIP have introduced new uncertainty for Scottish budgeting.
ADP as a gateway to Universal Credit?
The green paper proposes abolishing the work capability assessment by 2028-29 and replacing it with PIP. In Scotland people get ADP instead and, as discussed, there are currently no plans to limit eligibility for ADP. This raises the question of how people in Scotland will qualify for the health element of Universal Credit. At the moment PIP and ADP are treated ‘like for like’ in the benefit system. However it is not guaranteed that this would always be the case if PIP and ADP became less alike.
Increasing caseload in Scotland
The reforms in England and Wales are a response to rising caseload and thus rising spending.
Like the rest of the UK, there are increasing numbers of people in receipt of the main ‘working age’ disability benefit. Between March 2022 and January 2025 the number of people in Scotland claiming either PIP or ADP increased by 51% (from 310,545 to 468,470).
Caseload by age
Around half of people getting ADP/PIP are aged 55 or older.
The number of people on PIP/ADP has increased by around 158,000 between March 2022 and January. Most (58%) of this increase is from people aged 55 or older. While the number of young people receiving these benefits has also increased considerably (with an additional 24,000 25 to 34 year olds in receipt), this only makes up 15% of the total increase.
Disability benefits by main condition
Around two-thirds of people getting ADP/PIP are getting it for either mental health reasons or musculoskeletal conditions and that hasn’t changed much over the last three years.
At the moment the detailed impact of the proposals on the Scottish budget is far from clear. Once those details are available, the Scottish Government will need to decide how it will afford to maintain its current policy on disability benefits.
Camilla Kidner, SPICe research, March 2025
Disability Benefit Reform – implications for Scotland
