Nearly four million households are set to receive an income boost under proposed welfare reforms, the Department for Work and Pensions (DWP) has confirmed. The main rate of universal credit will increase above inflation every year for the next four years, estimated to be worth £725 by 2029/30 for a single household aged 25 or over. This is about £250 more than inflation-only increases, the government said.
The government laid out details of the changes to the welfare bill on Monday, stating that it had “listened to the MPs who support the principle of reform but are worried about the pace of change for those already supported by the social security system”. The bill will rebalance universal credit rates by reducing the health element for new claims to the equivalent of £50 per week from next April. This aims to fix a system which “incentivises people to define themselves as incapable of work by paying health element recipients more than double the standard amount”, the DWP said.
Work and pensions secretary Liz Kendall said: “We must build a welfare system that provides security for those who cannot work and the right support for those who can. Too often, disabled people feel trapped - worried that if they try to work, they could lose the support they depend on.” The DWP also announced that 200,000 people in the Severe Conditions Criteria group would not be called for a universal credit reassessment.
Last week, Prime Minister Sir Keir Starmer offered concessions including limiting cuts to the personal independent payment (PIP) ahead of the bill’s second reading and vote on Tuesday. He said that under the bill, all existing recipients would remain on the current system, and eligibility restrictions would only apply to new claimants from November 2026. “For too long, meaningful reform to our welfare system has been ducked and delayed,” the DWP said. “The government is taking decisive action and the difficult decisions needed to restore trust and faith in the system.”
The UC and PIP Bill will have its second reading in the House of Commons on Tuesday. Starmer told broadcasters on Friday: “The most important thing is that we can make the reform we need. We talked to colleagues, who’ve made powerful representations, as a result of which we’ve got a package which I think will work, we can get it right.”
