Labour wants to remove the “financial incentive” to going on benefits, Liz Kendall has told the House of Commons.
Addressing the house this afternoon, the work and pensions secretary set out how the government intends to reform the welfare system.
This included announcements such as scrapping the work capability assessment for universal credit, narrowing the eligibility for Personal Independence Payment (PIP), an a “permanent, above-inflation rise” to the standard allowance of universal credit.
Hitting out at the “legacy of 14 years of Tory failure”, Kendall said the government was aiming to remove the “financial incentive” to turn to welfare.
She said: “We will legislate to rebalance the payments in Universal Credit from April next year, holding the value of the health top up fixed in cash terms for existing claimants and reducing it for new claimants, with an additional premium for people with severe lifelong conditions”.
The government hopes the reforms will save £5bn a year by the end of the decade, the BBC reports.
There had been reports in recent days that the government was planning on freezing PIP and means testing the benefit.
However, Kendall announced this would not be happening, following rumours of a potential rebellion from Labour MPs who disagreed with the prospect of freezing payments.
But eligibility for the payment will be tightened, meaning less claimants will be able to receive it.
Labour announced a change to increase the number of points applicants need to score in an assessment for the benefit to be found eligible for it.
People with the most “severe disabilities and health conditions” which do not change will not be reassessed repeatedly as part of the new reforms.
Related: Keir Starmer is abolishing NHS England – What does this actually mean?