Disability payments to the UK’s poorest households have soared, driven by a surge in mental health claims as families seek to maximize their benefits.

The Resolution Foundation attributes this rise to both a deteriorating population health and a flawed welfare system that "encourages claimants to apply for disability benefits," which are difficult to revoke once granted.

Analysis of the lowest-income fifth of households shows their average disability benefit income has risen more than fourfold, from £220 in 1995 to £1,070 in 2023. As a result, disability benefits such as Personal Independence Payment (PIP) and Disability Living Allowance now make up nearly a third of the income for low-to-middle-income households that claim them.

Overall, disability benefits now account for 14% of total benefit income among lower earners, with a sharp rise since the 2010s when then-Chancellor George Osborne tightened eligibility for some unemployment and sickness benefits.

The surge comes as Work and Pensions Secretary Liz Kendall prepares to announce a welfare reform plan, with the government scrambling to avoid an emergency Budget on March 26. Ministers are exploring ways to cut billions from the rapidly rising benefits bill, which is projected to exceed £100bn by the decade’s end.

Adding further pressure, a recent High Court ruling deemed changes to incapacity benefits by the Tory government unlawful, potentially disrupting the Chancellor’s Budget plans.

Official data reveals that mental health conditions have played a significant role in the increase in claims since the pandemic. A record 500,000 adults are now claiming disability benefits for anxiety and depression.

Lalitha Try of the Resolution Foundation noted that changes to the welfare system have encouraged some claimants to seek disability benefits as a more stable income source. She highlighted that the real value of unemployment benefits has fallen by 8% since 2010-11, while Universal Credit comes with stricter conditions and can be more easily revoked.

She explained that disability benefits, unlike Universal Credit, are not subject to the benefit cap and do not carry the same conditionality, making them a more secure option for many claimants.

Try also pointed to Britain’s ageing and increasingly unwell population as a contributing factor. She noted that a rising state pension age and demographic shifts have increased the working-age disability benefits caseload by 272,000 between 2013 and 2023, accounting for a quarter of the overall rise.

Additionally, the inclusion of mental health and learning-related disabilities in PIP eligibility has expanded access to financial support for a broader group of disabled individuals facing extra living costs.