The UK government is slashing welfare payments for new claimants – here’s who gets hit and who’s protected
- From Monday, most new Universal Credit claimants assessed with limited capability for work will receive roughly half the previous health top-up (£217 per month instead of £430), while existing claimants and those with the most severe lifelong conditions remain fully protected.
- The government is cutting the health element for new claims to remove “perverse incentives” keeping people out of work, while increasing the standard Universal Credit allowance above inflation for nearly 4 million households.
- £3.5 billion is being invested across the UK in voluntary employment programmes, including Connect to Work and WorkWell, to help hundreds of thousands of disabled people and those with health conditions move into employment.
- People already claiming the higher rate, those with terminal illnesses, and individuals with the most severe conditions never expected to work are unaffected by the payment cut.
The UK government has introduced major welfare reforms aiming to encourage more people into work by reducing financial incentives for some claimants to remain on health-related benefits.
The changes primarily target the health element of Universal Credit for new claimants while boosting the standard allowance for millions and investing billions in employment support.
Under the previous system, people assessed as having limited capability for work or work-related activity (LCWRA) could receive a health top-up of around £429.80 per month on top of the standard Universal Credit allowance.
This often exceeded the payments received by unemployed individuals actively seeking work, creating what ministers described as “perverse incentives” that discouraged employment.
From 6 April, most new claimants assessed as LCWRA will receive a significantly lower health element of £217.26 per month – roughly half the previous rate. This element will then be frozen in cash terms through to 2029/30.
The government estimates the move will save nearly £1 billion in taxpayer funds by narrowing the gap between out-of-work health-related payments and those for jobseekers.
In parallel, the standard allowance of Universal Credit, received by nearly four million households, is receiving its first sustained above-inflation increase.
For example, a single person aged 25 or over will see their base rate rise to £424.90 per month, delivering an extra £295 in cash terms this year (around £110 above inflation). Further real-terms uplifts are planned annually through 2029/30.
“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,” said Work and Pensions Minister Sir Stephen Timms.
“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.”
Who gets hit
The primary group affected is new Universal Credit claimants found to have limited capability for work due to health conditions or disabilities, but who do not qualify for the highest protections.
- They will receive the halved health element (£217.26/month instead of £429.80).
- This could mean thousands of pounds less in annual support compared to what similar claimants received previously.
- The change applies to claims starting on or after 6 April 2026.
Critics have previously warned that such reductions could push vulnerable people closer to poverty, though the government frames the reforms as removing barriers to employment rather than punitive cuts.
Who is protected
Not everyone on health-related benefits faces a reduction:
- All existing claimants already receiving the LCWRA element will continue at the higher rate of £429.80 per month (with the standard allowance uplift applied on top).
- People with the most severe, lifelong conditions, those never expected to work, and individuals nearing the end of life (under special terminal illness rules) are fully protected and will receive the higher rate even if they make a new claim after Monday.
- Personal Independence Payment (PIP), which helps with extra costs of disability and is separate from the Universal Credit health element, remains untouched for existing recipients. Earlier proposals for tighter PIP eligibility were significantly watered down or delayed following parliamentary scrutiny.
The reforms explicitly shield the most vulnerable while targeting what ministers call a system that previously trapped people on benefits without adequate support to return to work.
