Personal Independence Payment (PIP) replaced Disability Living Allowance (DLA) when Welfare Reform was introduced to Northern Ireland.
Government statistics show that nearly 8,000 DLA claimants across Derry City & Strabane District Council were reassessed under PIP rules since 2016, and that 38% of people received a reduced award or no award at all.
The controversial PIP medical assessments are carried out by private firm Capita.
Mr Farrell said: “Welfare cuts are here and the sick and disabled are paying the price.
“The latest figures for Derry City and Strabane District Council show that 20% of DLA claimants applied for PIP but their claims were rejected as they didn’t score enough points.
“A further 18% qualified for PIP, but at a lower rate than DLA.
“That’s over 3,000 people living in our council area that are victims of welfare cuts.
“That’s over 3,000 local people that have been disadvantaged by the decision of Sinn Fein, the DUP and Alliance to endorse Tory austerity.
“Thankfully, many people have successfully challenged these decisions.
“The medical assessments conducted by Capita often lead to inaccurate awards and these are regularly overturned at appeal tribunals. This is further evidence that the current process is unfair and needs to change.”
The SDLP candidate added: “People with illnesses and disabilities are being let down by the PIP and many are being forced into a lengthy appeal process.
“The entire system, including Capita’s role in it, needs serious attention to ensure people get the financial support they need and deserve.”