The UK government is considering plans to overhaul disability benefits for young people under 25, proposing to replace the health element of universal credit with a comprehensive support package aimed at helping them enter the workforce.

Currently, young claimants can receive a health component of universal credit amounting to £217 per month. Under the proposed changes, this payment would be removed, and instead, individuals would be offered enhanced employment support, including subsidised job placements, back-to-work programmes, and targeted mental health assistance.

This initiative is part of a broader effort to address youth unemployment, which affects over one million people aged 16 to 24 who are not in education, employment, or training. Alan Milburn, a former Labour health secretary, is leading a government review focused on tackling this issue. His interim findings highlighted a disproportionate spend on benefits relative to employment support, estimating that £25 is paid out in benefits for every £1 spent on job-related assistance. Milburn’s final report, expected soon, advocates a “tough love” approach, emphasizing that young people receiving health and disability benefits should engage with employment opportunities if they are capable of working.

Milburn has suggested that individuals with conditions such as mild ADHD or anxiety, who are on health-related benefits but able to work, should have an “obligation” to participate in work-focused programmes. He also proposed introducing a “backstop” measure, similar to policies in other European countries, where benefits could be reduced if claimants repeatedly fail to engage with tailored employment support. He emphasized that this would be a last resort, applied only to those without severe and enduring disabilities.

Separately, Sir Stephen Timms is overseeing a review of personal independence payments (PIP), the disability benefit claimed by about four million people. The government is reportedly exploring a replacement system for PIP following opposition from Labour MPs to earlier proposals to tighten eligibility rules.

A government spokesperson stated that a “comprehensive package of support and reform” is forthcoming to address the issue of young people not in education, employment, or training, stressing a commitment to “enabling work and opportunity” while protecting those unable to work.

Statistics indicate that less than half of benefit expenditure for 16- to 24-year-olds includes any work-related requirement. Additionally, the number of young people receiving means-tested benefits without obligations to engage with employment support nearly doubled from 160,000 in 2019 to 300,000 by the end of 2025. Among 16- to 24-year-olds claiming PIP, nearly two-thirds cite conditions such as ADHD, autism, anxiety, or depression as their primary disability.

The proposed reforms seek to reshape the welfare system for young disabled and health-affected claimants by linking benefit support more closely with employment engagement, reflecting a shift in government strategy toward combining assistance with accountability.