The government has shared its long-awaited plans to change disability benefits in the UK today. The shake-up comes as Labour moves ahead with its plans to cut benefit spending by billions of pounds by pushing more people back into work. Overall, the government currently spends £65billion a year on health and disability-related benefits and this is projected to increase to £100billion by 2029.
Liz Kendall made the announcement today at 12:30pm. ITV last week published a leak on proposals, which mainly focused on the disability benefit Personal Independence Payment (PIP) and the announcements today did mainly cover this benefit. Although some changes were also announced for Universal Credit. This leak divided Labour MPs with some voicing concerns on the impact on vulnerable claimants.
Some of the changes put forward today included imposing stricter criteria for PIP and altering the health element of Universal Credit. Here, we explain everything you need to know about Universal Credit, the changes that have been proposed, and how these could impact you.
Universal Credit is the largest working-age benefit, and according to the latest DWP data, it is paid to 7.5 million people. You can claim Universal Credit from the DWP if you are unemployed or you are working but on a low income. There is no set level for how much money you get every month – what you get is dependent on your personal circumstances which include things like age, whether you live in a couple, and whether you have children.
However, there is a base rate for Universal Credit, and that’s called the “standard allowance”. Then, if you’re eligible, you can get additional payments to support other costs. These are all applied to give your total figure before any deductions are then made based on whether you work, have savings, and other measures. These rates are rising from April 2025, and below is the current rate – alongside what it will rise to next from next month:
If you have children, you can claim more, and the rate varies depending on how many children you have – if you have a disabled child, then you are also eligible for added support.
Regarding working, your Universal Credit claim will be placed into either one of four work activity groups, highlighting what you should be doing to keep your Universal Credit claim. According to Citizens Advice, these include:
For people who are fit to work, the DWP places claimants into groups known as “Light Touch” and “Intensive Work Search” and the Government’s Administrative Earnings Threshold (AET) determines which group a person is placed into. It is based on how much they earn per calendar month with those above the threshold falling within the light touch group and those below into the intensive work group. If you fall into the latter, you need to work more to keep your benefits.
Currently, claimants who have health conditions or disabilities have to undergo a Work Capability Assessment to decide whether they’re capable of working and if they’re eligible for cash top-ups when they claim Universal Credit. These top-up payments are called the limited capability for work and work-related activity (LCWRA) payments – these are the current rates and how much they will be rising to in April:
Universal Credit claimants can also be given a work allowance which sets how much they can earn through work before their Universal Credit is cut. However, it is normally only available to those who have responsibility for a child or have a disability or health condition that affects their ability to work. Under the rules, your Universal Credit payment is cut by 55p for every £1 earned above the work allowance.
The Government announced in its Autumn Statement that it was going to make changes to the Work Capability Assessment, and today, Kendall announced that it was going to be scrapped altogether in 2028. Instead, it will use the PIP assessment for those claiming the health element for Universal Credit.
Kendall said: “In future, extra financial support for health conditions in universal credit will be available solely through the PIP. So extra income is based on the impact of someone’s health condition or disability, not on their capacity to work, reducing the number of assessments that people have to go through and a vital step towards de-risking work.”
The government also confirmed today that it would be going ahead with its “right to try” policy. This would see disabled benefit claimants able to retain their benefits should they undertake employment that does not become long-term. She said: “We will do more by legislating for a right to try, guaranteeing that work, in and of itself, will never lead to a benefit reassessment, giving people the confidence to take the plunge and try work without the fear this will put their benefits at risk.”
Alongside this, the government will bring in a “permanent, above-inflation rise” to the Standard Allowance of Universal Credit hiking it by £775 by 2029-30. However, Kendall said that Universal Credit needed to be “rebalanced” and that it was going to “hold the value” of the benefit’s health top-up for existing claimants starting in April of next year. This means it will not rise alongside other benefits and will remain at its current value.
The government will also reduce the top up for new claimants and add an “additional premium” for people with severe lifelong conditions. According to the Green Paper, from April next year, the health top-up will be reduced for new claims from the current £97 a week to £50 per week. The government says this group “will benefit” from the higher standard allowance which will “partially offset” this reduction.
Kendall also said the government would consult on stopping people getting the health top-up for Universal Credit until they are 22. She said the savings would be “reinvested into work, support and training opportunities so every young person is earning or learning and on a pathway to success”.
Kendall also confirmed that people on Universal Credit who have the most severe health conditions and disabilities will also never have to be reassessed. Although it would be beefing up reassessments for Universal Credit and PIP, as the focus wil shift back to face-to-face assessments, as opposed to video or phone assessments.
The government confirmed that it would be spending around £1billion on getting the long-term sick “back to work”. Part of this includes, the extra 1,000 work coaches that are to be deployed to JobCentres across the UK to help sick and disabled people find employment. This would involve “tailored and personalised support to help people on a pathway to work, the largest ever investment in opportunities to work for sick and disabled people”.
The Secretary of State for Work and Pensions, Liz Kendall, reiterated that the reforms would not impact those with the most “severely disabled”. She told MPs in the commons: “We know there are always people who cannot work because of the nature of their disability or health condition, and those people will be protected.”
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