Prime Minister Andy Burnham said the proposed reforms are intended to create a “fairer and more sustainable” welfare system, with measures expected to make it more difficult for some people to qualify for long-term benefits while increasing support for those able to return to employment.

Although the proposals are primarily aimed at people living in the UK, British citizens residing overseas, including in Portugal, are being encouraged to monitor developments, particularly if they receive or intend to claim UK benefits.

Focus on employment

The reforms are expected to place greater emphasis on helping people into work, while tightening eligibility for certain health and disability-related payments. The government argues that the current welfare system has become financially unsustainable following a sharp rise in the number of people claiming long-term sickness benefits.

Burnham said the objective is to ensure that support remains available for those who need it most, while encouraging those who are able to work to re-enter the labour market.

The proposals will require parliamentary approval before becoming law and could be subject to amendments during the legislative process.

What it means for Britons in Portugal

Many UK state benefits are subject to residency rules, meaning entitlement can vary depending on where a claimant lives. While some payments, including the UK State Pension, can continue to be received abroad, others are only available under specific circumstances or may cease after moving overseas.

Anyone living in Portugal who currently receives UK benefits, or is considering making a future claim, should seek updated guidance before assuming their entitlement will remain unchanged if the reforms are implemented.

The UK and Portugal continue to coordinate certain social security arrangements under the UK-EU Trade and Cooperation Agreement, helping protect some pension and contribution rights following Brexit. However, individual entitlement depends on personal circumstances and the type of benefit involved.

Wider debate

The proposed reforms have prompted debate across the UK, with supporters arguing they are necessary to control rising welfare costs and address labour shortages. Critics, however, have warned that tighter eligibility rules could place additional pressure on vulnerable people with long-term health conditions or disabilities.

The government is expected to publish further details as legislation progresses through Parliament.