Quarter of UK mental ill health benefit claimants expect to lose out from planned reforms, charity says

By David Milliken

LONDON (Reuters) -Around one in four British people with poor mental health who claim welfare benefits expect to lose their entitlement under proposed government reforms, according to research published by a charity on Thursday.

Britain's government aims to save 4 billion pounds ($5.4 billion) a year by 2029-30 through tightening the rules for claiming a benefit known as personal independence payment (PIP) designed to cover disability-related costs, whether a claimant is in work or not.

The Money and Mental Health Policy Institute said it interviewed 227 people with mental health conditions who receive PIP, which can be worth nearly 6,000 pounds a year.

Some 24% of those surveyed said they expected to lose the benefit, while 39% were unsure if they would be affected.

About one in five of those surveyed were in work, and nearly two thirds of them said reducing the benefit would make them work less, rather than more, due to difficulty affording transport costs or private mental health support.

"Our analysis shows that these changes would actually result in many people with mental health problems who have a job cutting their hours or leaving the workplace altogether," the charity's chief executive, Helen Undy, said.

PIP is paid to 3.7 million people in England and Wales, 6% of the population, and new claims have risen by two thirds in recent years.

The government hopes that tighter eligibility rules will encourage more claimants to seek work. Under the government plans, claimants would need to have a severe difficulty in at least one area of daily life to qualify for the benefit, rather than a range of less severe problems.

Britain's budget watchdog in March estimated that a third of claimants would be affected by the change, of whom around half would lose benefits after being reassessed.

The new plans are subject to consultation until the end of the month. Finance minister Rachel Reeves has been under pressure from campaigners to reconsider, following a U-turn over a decision to scrap heating subsidies for most pensioners.

($1 = 0.7372 pounds)

(Reporting by David Milliken; editing by William James)