Tories demand ban on foreigners claiming disability benefits | Personal Finance | Finance

Foreigners should be blocked from claiming key disability benefits as part of a crackdown on ballooning welfare bills, under proposals being championed by Kemi Badenoch. People with what are described as ‘mild’ conditions, such as anxiety, would also be barred.

The moves would see access to Personal Independence Payments (PIP) and Universal Credit sickness top-ups severely restricted.

The Tories claim the shift could save billions amid growing concerns that the system is being “gamed”.

However, there is a dispute over the savings available as there are already significant restrictions on who can claim PIP and Universal Credit.

Personal Independence Payment (PIP) – Who can claim?

PIP is available mainly to UK residents, but some foreign nationals may be eligible if:

• They are habitually resident in the UK.
• They have been in the UK for at least 2 of the last 3 years.
• They have indefinite leave to remain (ILR), refugee status, settled status under the EU Settlement Scheme, or another immigration status allowing access to public funds.

Who cannot usually claim PIP

Tourists, visitors, most people here on student visas, or work visas without access to public funds.

People subject to immigration control, unless specifically exempt (e.g. refugees).

Universal Credit – Who can claim?

Foreign nationals can claim Universal Credit only if they meet specific residency and immigration conditions. These typically include:

• Having a right to reside in the UK.
• Passing the habitual residence test.
• Being lawfully present and not subject to immigration control.

Eligible groups may include:

• EU/EEA nationals with settled or pre-settled status under the EU Settlement Scheme.
• People with indefinite leave to remain or refugee status.
• Some non-EU migrants with leave to remain with recourse to public funds.

The Tory plan would ensure only British citizens and some EU migrants with settled status would be allowed to claim. It appears people granted refugee status would be among those who would lose out.

The move is part of a renewed offensive by the Conservatives to draw a sharp dividing line with Labour and Reform on welfare reform. Helen Whately, the shadow work and pensions secretary, accused Labour of dithering.

She told the Telegraph: “The Government’s welfare plans are in chaos.

“We’ve told them how to fix it: stop signing people off sick for mental health problems like anxiety, bring back face-to-face assessments, and only give sickness benefits to British citizens.”

She added: “If ministers had the guts to take up even one of these proposals, they could save billions – and spare the country from more tax rises this autumn.”

Mrs Badenoch is expected to lay out the new plans in a major speech this week, which will also include proposals to:

Bar claims based on ‘mild’ conditions such as anxiety, mild depression and ADHD.

Restore face-to-face assessments for all PIP claims, amid concerns that phone-based checks are being exploited. Data shows awards are 13% more likely when assessments are done remotely.

She will warn that Labour and Reform are both preparing to cave in to internal pressure to scrap the two-child benefit cap – a move that would cost taxpayers £3.4 billion a year.

“The Conservatives are now the only party committed to serious welfare reform,” she will say.

“We are the only party that is prepared to take the tough decisions to get spending under control.”

PIP, which pays up to £750 a month, was designed to help those with higher living costs due to long-term health problems. But there has been a sharp rise in people claiming for mental health reasons, with 531 people a day awarded the benefit on that basis last year.

Recent disclosures have revealed awards granted for conditions ranging from writer’s cramp to acne.

Recipients can be either in work or unemployed, and those signed off with long-term sickness are placed in one of two categories:

• A top rate of £423 a month for those deemed too ill to seek work.
• A lower rate of £158 a month for those expected to prepare for employment.

More than three quarters of sickness benefit claimants last year were placed in the highest-paying group.

The Tories’ plans would limit both levels of health-related top-ups to British citizens. EU nationals with settled status – protected under the Brexit withdrawal agreement – would remain eligible.

The proposals are being tabled as amendments to Labour’s now-weakened welfare Bill, which will come before MPs on Wednesday.

Mrs Badenoch’s allies say the reforms honour a pledge she made in her first major speech as Tory leader, where she said: “We must look after British citizens first.”

But Labour dismissed the announcements as political posturing.

A spokesman said: “These uncosted and unserious proposals from Kemi Badenoch are nothing but a desperate attempt to stay relevant.

“The Conservatives had 14 years to reform welfare. Instead, they left the country with a broken system that is neither fair to taxpayers nor to those who need support.”

He added: “This Labour Government is already delivering more face-to-face assessments, which massively declined under the Tories.

“Our reforms to Universal Credit reduce the disincentives to look for work introduced by the Conservatives.”

Spending on PIP and its predecessor is projected to rise to £28 billion a year by 2028-29. Total spending on disability benefits is set to soar from £39 billion to £58 billion over the same period, according to the Office for Budget Responsibility.