Changes to motability payments which help disabled people to access cars will be looked at next year after a review into disability benefits has concluded, a minister has said.
Chancellor Rachel Reeves is said to be looking at reforming how the scheme works to find savings at next month’s Budget.
But the minister for disabilities said any change to the amount of financial support disabled people are entitled to – including funding to pay for the motability scheme – would not be changed imminently.
Personal Independence Payment (PIP) claimants on the higher rate can use their benefits, which are not related to whether they are in work or not, to pay to lease a new vehicle if they need help getting around.
Sir Stephen Timms said the Government will hold off making changes to eligibility criteria until he has finished a review into PIP in Autumn 2026.
Timms, who is leading the review into PIP assessments and how entitlement is calculated, was asked about the government’s motability scheme in Commons questions.
Labour backbencher Emma Lewell, the South Shields MP, told the Commons: “Motability is a lifeline for people with disabilities for getting to health appointments, studying, maintaining employment and so much more.
“Cuts to the scheme risk increased health needs and increased unemployment likely to cost much more than any short-term savings.
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“Does (Timms) agree that before any proposed cuts, a proper impact assessment is absolutely vital?”
The minister said: “There will be no changes to the eligibility conditions for the PIP mobility component or indeed the other aspects of PIP until the conclusion of the review, which I will be leading and co-producing with disabled people.
“And that’s expected to report in the autumn of next year.”
Reports have suggested the Chancellor is looking to remove premium brands of car like BMW and Mercedes from the scheme.
Reeves is also considering changes to the way Motability drivers are taxed, saving around £1 billion, according to The Times.
According to the Department for Work and Pensions, just over £3bn worth of welfare was transferred to the motability scheme for the financial year 2024 to 2025.
The scheme is exempt from VAT – for both the hire of a car and the sale of a lease – which is something the Chancellor is reported to be looking at changing.
But changes to who is eligible for the scheme, and how much funding they get, will be tied to the wider review into PIP payments which was launched by the government after efforts to cut eligibility were rejected by MPs.
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