UK reports sharpest rise in health-related welfare claims, study shows

LONDON (Reuters) – Britain has seen the biggest rise in health-related welfare benefits among a group of similar economies, according to a report published on Thursday – underscoring the challenge which the new government faces to get people back into work.

The Institute for Fiscal Studies, an independent think tank, said the number of working-age people receiving health-related benefits in England and Wales jumped by 38% in four years to 3.9 million people or 10% of the working-age population.

By contrast, the figure fell or remained flat in Australia, Austria, Canada, France, Germany, Ireland, the Netherlands, Norway, Sweden and the United States, the IFS said. Denmark, the only other country to see a significant rise, recorded a 13% increase.

Eduin Latimer, an IFS economist and an author of the report, said the COVID pandemic and the cost-of-living crisis might have hit Britain harder than other countries due to strains on the health service and low unemployment benefits, but the exact causes of the country’s problems remained unclear.

“Figuring out what is behind the recent rise must surely be a top priority for the government if it is going to be able to respond appropriately,” he said.

Under Britain’s benefits system, a single person who is unemployed would typically receive 393.45 pounds ($520.10) a month plus housing costs, and may have to prove they are spending as much as 35 hours a week looking for work.

But if they are classed as long-term sick instead, they can receive an extra 416 pounds a month and an exemption from work requirements.

Last year, the government of former Prime Minister Rishi Sunak announced incentives and sanctions to try to curb high levels of inactivity among working-age people.

New Prime Minister Keir Starmer has said he also wants to get more people into work but plans to do it mainly by improving the health service.

The IFS said the increase in health-related welfare spending was concentrated in areas that had high numbers of claimants before the pandemic.

Despite the jump, the UK’s spending on working-age health-related benefits was similar to that of other comparable countries at around 1.7% of national economic output but that could rise if recent trends continue, it said.

($1 = 0.7565 pounds)

(Writing by William Schomberg; editing by David Milliken)