Working-age benefits bill to hit £100bn

Disability claims in wake of pandemic expected to raise burden by a further 30pc by end of the decade

this year amid a surge in disability claims since lockdown.

The cost of welfare payments including universal credit, housing subsidies and disability benefit is expected to jump by almost 30 per cent in real terms to £130billion by the end of the decade, according to forecasts by the Department for Work and Pensions (DWP).

The figures, which estimate that the cost of working age benefits will rise to £100.9billion this financial year, show payments leapt by more than a 20 per cent in the year after the 2020 lockdown, from £78.9billion to £95.6billion in 2020-21 after a surge in claims related to mental health and muscular pain.

Britain’s worklessness crisis comes as official figures this week revealed that a record 2.8 million people are not even looking for work because they say they are too ill. Tom Waters, of the Institute for Fiscal Studies, said the increase had been driven by rising housing benefit payments, cost of living payments, and a sharp rise in disability claims.

He said: “Before the pandemic, every month about 20,000 new people would flow onto disability benefits. It is now about 40,000 – and it has not shown any sign of slowing down.”

DWP estimates the cost to the taxpayer of working age disability benefits will rise by 27 per cent in real terms from £61.5billion this year to £78.2billion by the end of the decade.

David Miles, an executive member of the Office for Budget Responsibility (OBR), has warned Rishi Sunak to do more to rein in welfare spending and get more people working rather than rely on immigration to control Britain’s debts.

There are 9.25 million people aged between 16 and 64 who are not working nor looking for work, according to the Office for National Statistics (ONS) – a figure that it revised up by 400,000 earlier this week.

Figures published by the tax and spending watchdog estimate the share of the working-age population reporting a disability has risen by 36 per cent over the past decade, while the share in receipt of a health or disability-related benefit has risen by 40 per cent.

A Government spokesman said: “With an extra four million people in work since 2010, our welfare reforms are going further, more than halving the net inflow of people on the highest level of health benefits.

“Our Back to Work Plan will help over a million people including those with disabilities and long-term health conditions start and stay in work, as we continue to bring down inflation, cut taxes and grow the economy.”