George Osborne is reportedly poised to use a reduction of £55 a week in benefit payments to disabled people in order to fund a middle-class tax giveaway at next week’s Budget.

The decision by Ministers to remove the PIP – Personal Independence Payment – benefits from more than 600,000 disabled people over the next five years, saving around £1 billion a year, could give the Chancellor leeway to bring down taxation for the middle-class.

According to the Daily Telegraph Mr Osborne wants to “accelerate progress” towards the Conservative manifesto pledge of raising the threshold to £50,000 at which people start paying 40p tax – a policy that could see thousands of high-earners pulled out of the higher rate of income tax.

Owen Smith, the shadow work and pensions secretary, posted on his Twitter account: “Already wicked to take another £1.2 billion from disabled, but truly obscene if switched for tax cuts at the Budget.”

"The introduction of Personal Independence Payment to replace the outdated Disability Living Allowance for working age claimants has been a hugely positive reform,” said Justin Tomlinson, the minister for disabled people, as he annouced the shake-up of the benefits.

He added: “But it is clear that the assessment criteria for aids and appliances are not working as planned. Many people are eligible for a weekly award despite having minimal to no extra costs and judicial decisions have expanded the criteria for aids and appliances to include items we would expect people to have in their homes already.”

The changes could cut more than £1.2bn from the welfare bill by reducing “points” for mobility problems, which claimants need to add together to qualify for the living costs fund.

Charities, however, warned that cutting the payment, which enables disabled people to afford specially-adapted appliances and equipment, will have a “devastating” impact on the lives of many.

On Friday a coalition of 25 disability charities wrote to the Government warning against the plans that would strip some disabled people of a key payment meant to help them live more independent lives.

7 ways the Tories have ‘helped’ disabled people Show all 7 1 /7 7 ways the Tories have ‘helped’ disabled people 7 ways the Tories have ‘helped’ disabled people Closing Remploy factories The Work and Pensions Secretary called time on Britain’s system of Remploy factories, which provided subsidised and sheltered employment to disabled people. People employed at the factories protested against their closure and said they provided gainful work. “Is it a kindness to stick people in some factory where they are not doing any work at all? Just making cups of coffee?” Mr Duncan Smith said at the time, defending the decision. “I promise you this is better.” The Remploy organisation was privatised and sold to American workfare provider Maximus, with the majority of the organisation’s factories closed. The future of the remaining sites is unclear 7 ways the Tories have ‘helped’ disabled people Scrapping the Independent Living Fund The £320m Independent Living Fund was established in 1988 to give financial support to people with disabilities. It was scrapped on July 1 2015, with 18,000 often severely disabled people losing out by an average of £300 a week. The money was generally used to help pay for carers so people could live in communities rather than institutions. Councils will get a boost in funding to compensate but it will not cover the whole cost of the fund. This new cash also doesn’t have to be spent on the disabled 7 ways the Tories have ‘helped’ disabled people Cut payments for the disabled Access To Work scheme Iain Duncan Smith is bringing forward a policy that will reduce payments to some disabled people from a scheme designed to help them into work. The £108m scheme, which helps 35,540 people, will be capped on a per-used basis, potentially hitting those with the more serious disabilities who currently receive the most help. The single biggest users of the fund are people who have difficulty seeing and hearing. The cut will come in from October 2015. The charity Disability UK says the scheme actually makes the Government money because the people who gain access to work tend pay tax that more than covers its cost. The DWP does not describe the reduction as a “cut” and says it will be able to spread the money more thinly and cover more people 7 ways the Tories have ‘helped’ disabled people Cut Employment and Support Allowance The latest Budget included a £30 a week cut in disability benefits for some new claimants of Employment and Support Allowance (ESA). The Government says it is equalising the rate of disability benefits with Jobseekers Allowance because giving disabled people more help is a “perverse incentive”. The people affected by this cut are those assessed as having a limited capability for work but as being capable of some “work-related activity”. A group of prominent Catholics wrote to Mr Duncan Smith to say there was “no justification” for this cut. Mental health charity Mind, said the cut was “insulting and misguided” 7 ways the Tories have ‘helped’ disabled people Risk homelessness with a sharp increase disability benefit sanctions Official figures in the first quarter of 2014 found a huge increase in sanctions against people reliant on ESA sickness benefit. The 15,955 sanctions were handed out in that period compared to 3,574 in the same period the year before, 2013 – a 4.5 times increase. The homelessness charity Crisis warned at the time that the sharp rise in temporary benefit cuts was “cruel and can leave people utterly destitute – without money even for food and at severe risk of homelessness”. “It is difficult to see how they are meant to help people prepare for work,” Matt Downie, director of policy at the charity added 7 ways the Tories have ‘helped’ disabled people Sending sick people to work because of broken fitness to work tests In 2012 a government advisor appointed to review the Government’s Work Capability Assessment said the tests causing suffering by sending sick people back to work inappropriately. “There are certainly areas where it's still not working and I am sorry there are people going through a system which I think still needs improvement,” Professor Malcolm Harrington concluded. The tests are said to have improved since then, but as recently as this summer they are still coming in for criticism. In June the British Psychological Society said there was “now significant body of evidence that the WCA is failing to assess people’s fitness for work accurately and appropriately”. It called for a full overhaul of the way the tests are carried out. The WCA appeals system has also been fraught with controversy with a very high rate of overturns and delays lasting months and blamed for hardship 7 ways the Tories have ‘helped’ disabled people The bedroom tax The Government’s benefit cut for people who it says are “under-occupying” their homes disproportionately affects disabled people. Statistics released last year show that around two-thirds of those affected by the under-occupancy penalty, widely known as the ‘bedroom tax’, are disabled. There have been a number of high profile cases of disabled people being moved out of specially adapted homes by the policy. In one case publicised by the Sunday People last week, a 48 year old man with cerebral palsy was forced to bathe in a paddling pool after the tax moved him out of his home with a walk-in shower. The Government says it has provided councils with a discretionary fund to help reduce the policy’s impact on disabled people, but cases continue to arise

The Disability Benefits Consortium wrote to the minister for disabled people, Ms Tomlinson, to argue that proposed changes to PIP would have a “severe impact” on people’s security and make it harder for them to find employment.

"Already wicked to take another £1.2 billion from disabled, but truly obscene if switched for tax cuts at the Budget” <p>Owen Smith, Shadow Work and Pensions Secretary</p>

“This decision could have a devastating impact on the lives of people with MS. In the worst cases, they could lose up to £150 a week,” said Michelle Mitchell, chief executive of the MS Society.

“PIP is an essential benefit which goes towards the extra cost of being disabled.

Protest outside Department of Work and Pensions

“The new plans will fail some of the most vulnerable people in society and we have serious concerns about the future health and welfare of those affected.”