New welfare rules are now in force which reduce the amount of money some Universal Credit claimants receive. Brits on low incomes could face changes to their Government support payments as people applying for Universal Credit may receive reduced amounts moving forward.
Key changes to Universal Credit health element
Sweeping new welfare regulations have taken effect, slashing payments for certain Universal Credit claimants deemed unfit for work due to illness or disability. New applicants for the health component of Universal Credit will now receive £217.26 monthly – approximately half the existing rate of £429.80 paid to current recipients. However, the modification applies only to new claims. Existing recipients on the higher rate, alongside people with the most serious or lifelong conditions and those approaching end of life, will maintain the full payment.
Reform rationale and impact
The Department for Work and Pensions (DWP) explained that the reforms aim to remove what it characterised as "perverse incentives" from the system and help more individuals into employment through personalised support. Ministers additionally confirmed the modifications will reduce projected Universal Credit expenditure by nearly £1 billion. The most recent data shows that around 2.7 million people across Scotland, England and Wales are currently claiming Universal Credit with limited capability for work and work-related activity (LCWRA). Those within this group are not obliged to look for work or take part in work-related activities.
Standard allowance increase
Alongside the cut to the health element for new claimants, the UK Government increased the standard Universal Credit allowance on April 6. This means nearly four million households will receive approximately £295 more throughout the course of this year, in what ministers claim is intended to help with the ongoing cost of living pressures.
Ministerial and expert reactions
Social security and disability minister Sir Stephen Timms said: "The welfare system we inherited has for too long locked disabled people and people with long-term conditions out of work. Laws coming into force today will change that, reducing projected expenditure on Universal Credit by almost £1 billion. Simultaneously boosting the standard allowance and investing £3.5 billion in employment support means we're creating a welfare system that backs people to work and helps them build a better future."
Evan John, Policy Advisor at Sense, said: "Benefits are a lifeline for disabled people, and at a time of rising living costs, support should be strengthened, not reduced. It is deeply worrying the government appears to be laying the groundwork for cuts affecting disabled people aged 16 to 21, regardless of need. This could have a devastating impact on young people with complex conditions who are unable to work. The support, worth £2,600 a year, helps cover basic living costs and allows some to prepare for employment. Scrapping it risks pushing young disabled people further into poverty and isolation, increasing the barriers they already face. The government should rule out further cuts and instead invest in support to help disabled people find and stay in work."
Scope and future PIP review
The changes will be implemented across Scotland, England and Wales, as Universal Credit falls under the remit of the UK Government, although certain disability benefits are managed independently in Scotland. Plans to reform Personal Independence Payment (PIP) have been shelved, with ministers choosing to launch a wider review into how the benefit functions instead. The review is expected to deliver its findings to Work and Pensions Secretary Pat McFadden this Autumn, with any prospective alterations unlikely to come into effect until that process has concluded.
