- Universal Credit legislation laid today to tackle perverse incentives that discourage work and trap people on long-term benefits.
- Changes to narrow the gap between payments for people on health-related benefits and those actively seeking work.
- It comes alongside £3.5 billion for tailored employment help by end of decade, including 1,000 dedicated work coaches offering voluntary support to tens of thousands of sick or disabled people.
Welfare reforms designed to rebalance the benefits system and support more people into work move forward today, as Universal Credit legislation is laid in Parliament (Monday 9 February).
The system inherited from the previous Government means people receiving Universal Credit for health reasons are paid more than twice as much as a single person looking for work and aren’t given the support to move closer to – or into – jobs.
The reforms – coming into force in April – will tackle these perverse incentives by introducing a lower Universal Credit health element rate of £217.26 per month for new claimants, compared to the higher rate of £429.80.
Those with the most severe, lifelong conditions, those nearing end of life, and all existing Universal Credit health claimants will continue to receive the higher rate.
To give people the support they’ve long been denied, this Government is investing over £3.5 billion in employment support by the end of the decade, ensuring everyone affected by the changes to Universal Credit will be offered personalised help to access the skills they need to progress, move into good, secure jobs, and boost their living standards – building a growing workforce and a growing economy for the future.
And as part of the Government’s focus on tackling the cost of living, the changes will also see almost four million households on the standard rate of Universal Credit receive the first sustained above-inflation increase to the benefit .
The boost is worth around £295 extra this year in cash terms for a single person aged 25 or over, rising to £760 by the end of the decade, and means those who are searching for and in work will have more money in their pocket as they look to get into and on at work.
Work and Pensions Secretary Pat McFadden said
The benefits system we inherited was rigged with the wrong incentives and wrote people off instead of backing them. We are changing this.
These reforms put more money in the pockets of working people on Universal Credit, while ensuring those who can work get the support they need to do so.
By boosting the standard allowance and investing in proper employment support, we’re building a welfare system that rewards work and offers people a route to a better future.
Over 1,000 Pathways to Work advisers are now based in Jobcentres across England, Wales and Scotland, offering personalised help to people on health-related benefits with no requirement to work – many of whom had no support before.
Tens of thousands have already taken up this support, with 65,000 people expected to benefit this financial year, and the Government is on track to meet its promise that everyone affected by these Universal Credit reforms will be offered personalised help.
Among those who have benefitted is Hayden, who has severe nerve damage in his legs following an accident, and spends hours each morning building up strength just to walk. He had always dreamed of becoming a personal trainer but couldn’t afford the course. With support from his Pathways to Work adviser — including help finding a suitable course and funding for equipment- Hayden begins his PT qualification at the start of February.
Hayden said
My Pathways to Work adviser saw my potential, not my limitations.
They found me the right course, and made sure I had everything I needed to succeed. I’m now training to become a Personal Trainer – something I never thought possible.
This support has genuinely transformed my future.
It comes alongside a wider support offer that meets sick or disabled people where they are. WorkWell is now rolling out across England supporting up to 250,000 more people, while Connect to Work will provide personalised help for 300,000 people over the next five years.
With 2.8 million people currently out of work due to long-term sickness, these measures are central to the government’s Plan for Change to break down barriers to opportunity and get Britain working.
By supporting more people into work and reducing the health element for new claimants, the reforms are set to save taxpayers £950 million by 2030/31 – delivering fairness for working people and taxpayers alike.
Additional information
- The Regulations implement provisions set out in the Universal Credit Act 2025.
- Existing claimants will continue to receive the higher LCWRA rate, as well as those meeting the Severe Conditions Criteria or subject to Special Rules for End of Life, no matter when they claim.
- The higher LCWRA rate is set to increase from £423.27 in 2025/56 to £429.80 in 2026/27.
- The boost is worth around £295 extra this year in cash terms or around £110 above inflation for a single person aged 25 or over, rising to £760 in cash terms by the end of the decade or around £250 above inflation.
- A customer currently receiving the LCWRA rate receives more than double the amount of a single customer receiving just the Universal Credit Standard Allowance.