A proposed benefits shake-up could see a change in the way claimants with limited work capabilities are assessed and receive their payments - and thousands could miss out.

The changes involve aligning the new health element of Universal Credit (UC) more closely with Personal Independence Payment (PIP) instead.

At present, Universal Credit claimants who are deemed to have “limited capacity for work-related activity (LCWRA)” receive an additional £390 per month on top of the standard allowance.

Proposed plans would see the LCWRA element scrapped and replaced by the health element, and people will only be awarded the extra payment if they receive the UC standard allowance as well as a component of PIP.

The new approach means there will be a single assessment — the PIP assessment — to determine eligibility for both PIP and the new UC health element. Those found not eligible for PIP would not receive the health element.

Figures released by the DWP in July showed 516,000 people who were in receipt of the LCWRA element did not qualify for PIP in November 2022, which accounts for 29 percent of all recipients.

This means thousands of people could potentially miss out on hundreds of pounds a month if changes go ahead. The DWP has said current claimants would receive “transitional protection”, but this is not expected to apply to new claimants.

However, charities have been urging ministers not to combine the two tests, with the group Z2K calling PIP a "deeply flawed assessment process".

Meanwhile, Anastasia Berry, policy co-chair of the Disability Benefits Consortium (DBC) and policy manager at the MS Society, warns the changes could “push many more disabled people into poverty”.

Ms Berry said: “It will cause significant stress and anxiety, and pose a real risk to people’s health and well-being.”

Ken Butler welfare rights and policy adviser for Disability Rights UK said previously: “Using PIP as a passport to the health component of UC is extremely problematic. All the issues relating to the lack of accuracy of WCA assessments apply equally to PIP – perhaps unsurprisingly, given five weeks of online virtual training for [the healthcare professionals who carry them out].

“Many disabled people have shorter-term debilitating health conditions and may not be eligible to receive PIP. Others will have claimed PIP but been wrongly refused it. In addition, the PIP assessment isn’t intended to assess a disabled claimant’s capability to work, it’s meant to capture the extra costs disabled people face in life (although it doesn’t do this very well).”

It comes as part of a rumoured wider shake-up across the DWP to get more people off benefits and back to work in a move that’s forecast to save £4billion from the welfare budget.

Broader changes could potentially lead to a larger number of people being forced to find work even if they are dealing with various physical and mental health conditions.

Speaking in the Commons in September, Mel Stride, the secretary of state for work and pensions said more than 2.5 million people were on benefits and inactive due to a long-term health condition.

He said the proportion of claimants assessed as too unwell to work had risen from 21 percent in 2011 to 65 percent in 2022.

Under the new proposals outlined in the Health and Disability Whitepaper, the LCWRA and support group for those who receive employment and support allowance would be scrapped, and work coaches in Job Centres would determine how much effort a person had to make to find a job.

A DWP spokesperson said: “This is purely speculation. The structural reforms set out in the Health and Disability White Paper, which will improve the experience of the benefits system for disabled people, will be rolled out gradually from 2026 and transitional protection will ensure nobody experiences a financial loss as a result of moving onto the new system."