George Osborne is set to use a reduction in benefits payments to disabled people of £1.2bn to cut taxes for the middle class. The chancellor is set to raise the threshold at which people start paying 40p tax, in a move that could see hundreds of thousands of people pulled out of the higher rate of income tax. Osborne wants to "accelerate progress" towards the Conservative's manifesto pledge of raising the threshold for the 40p rate to £50,000 in 2020, according to a Telegraph report.

The formula the government uses to calculate the daily living component of Personal Independence Payment (PIP) for disabled people will change in January. Claimants currently receive between £21.80-£139.75 per week.

The minister for disabled people, Justin Tomlinson, said: "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.

"This new change will ensure that PIP is fairer and targets support at those who need it most." A second independent review of PIP is due by April 2017.

PiP changes a 'huge blow'

Under the plans announced on Friday, 11 March, people will be less likely to receive disabled benefits if they use aids such as a handrail or a walking stick to get dressed or use the toilet.

The move was criticised by disability groups. Mark Atkinson, chief executive at disability charity Scope, said the changes would make it harder for some disabled people to qualify for the benefit.

"It is crucial that the PIP assessment accurately reflects the extra costs disabled people face," he told the BBC. "Buying specialist equipment, adaptations and other aids are significant and ongoing extra costs for many disabled people."

Labour described the changes as a "huge blow" and said the Conservatives are "ignoring the views of disabled people, carers and experts in the field".

The British government faced a series of demonstrations over plans to cut a fund which pays for carers to help disabled people in their homes. In June last year, a group of protesters attempted to storm the Chamber in the House of Commons.