The government has confirmed new DWP Universal Credit rules will be put in place as part of wide-ranging reforms to welfare benefits, especially those targeting sickness and disability.
In its newly unveiled Universal Credit and Personal Independence Payments Bill, the government has set out changes to several aspects of benefits being paid out as it looks to shave billions off the UK’s welfare bill by the end of the decade.
One key change is centred around the Health Element for Universal Credit. Right now, the health element of Universal Credit gives claimants extra money per week, equating to around £97 per week. The Universal Credit health element itself replaced two elements known as Limited capability for work and limited capability for work or work related activity, which paid up to £158.76 per month or £423.27 per month respectively, though these depend on a work assessment.
After these reforms, the health element of Universal Credit will be slashed to just £50 per month.
It comes at the same time that the standard Universal Credit rate will increase ‘above inflation’ each year, worth approximately £725 more by 2029.
In its announcement, the government said: “Nearly 4 million households will also receive an income boost with the main rate of Universal Credit set to increase above inflation every year for the next four years – estimated to be worth £725 by 2029/30 for a single household 25 or over. This is around £250 higher than an inflation only increases.
“The Bill will also rebalance Universal Credit rates by reducing the health element for new UC claims to £50 from April 2026, fixing a system which encourages sickness by paying health element recipients more than double the standard amount.”
As well as changing Universal Credit, the new law will look at Personal Independence Payments, by making it more difficult to score the points needed to gain the benefit.
It said: “The Bill will introduce a new additional eligibility requirement for the daily living component of PIP so that a minimum of 4 points must be scored on at least one daily living activity to be eligible for the daily living component. It will also rebalance Universal Credit.”
Work and Pensions Secretary Liz Kendall said: “Our social security system is at a crossroads. Unless we reform it, more people will be denied opportunities, and it may not be there for those who need it.
“This legislation represents a new social contract and marks the moment we take the road of compassion, opportunity and dignity.
“This will give people peace of mind, while also fixing our broken social security system so it supports those who can work to do so while protecting those who cannot – putting welfare spending on a more sustainable path to unlock growth as part of our Plan for Change.”
