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Millions of Universal Credit recipients stand to benefit from higher payments due to new government proposals.
However, the same legislation also proposes cuts to essential health-related benefits, raising concerns across the nation.
Key Changes in Universal Credit and PIP Bill
The Universal Credit and Personal Independence Payment (PIP) Bill, unveiled on Wednesday, outlines significant changes that will impact claimants and recipients alike.
Among the proposed reforms, Universal Credit payments will increase above inflation for four years, starting in 2026. These increases will apply to single claimants aged 25 and over, with specific percentage rises as follows:
- 2.3% increase for 2026-2027
- 3.1% increase for 2027-2028
- 4.0% increase for 2028-2029
- 4.8% increase for 2029-2030
By the end of this period, eligible claimants could receive an additional £725 per year, amounting to roughly £250 more than if payments were raised solely in line with inflation.
Nearly four million households are expected to benefit from these guaranteed increases, bringing relief to many low-income families.
Cuts to Health-Related Benefits: LCWRA Component Reduced
While the proposed increases for Universal Credit recipients are a step forward, the Limited Capability for Work and Work-Related Activity (LCWRA) component is set to experience significant cuts.
This benefit is crucial for individuals with severe health conditions who are unable to work, and it will be frozen at £97 per week starting from April 2026, meaning it will not rise with inflation.
New claimants from April 2026 will receive just £50 per week. This reduction will disproportionately affect individuals suffering from terminal illnesses, cancer patients, and others with long-term health conditions.
Additionally, more than 200,000 people with severe or permanently disabling conditions will be moved into a new category exempt from reassessment, but future claimants may face significantly lower levels of financial support.
Criticism of Proposed Changes
The proposed changes have sparked intense backlash from disability charities and advocacy groups, warning that these reforms could leave over three million people worse off. Some individuals could lose up to £12,000 annually under the new rules.
James Watson-O’Neill, the chief executive of disability charity Sense, expressed his concerns, especially about the Universal Credit uplift cuts for those with the greatest barriers to work.
He emphasized that many disabled individuals and families are deeply worried about how they will afford basic necessities like food and heating without this vital support.
Shirley-Anne Somerville, Scotland’s Social Justice Secretary, also voiced her concerns, condemning the UK government’s proposed cuts. She stated that these reforms would be damaging, particularly during the ongoing cost of living crisis.
She further confirmed that Scotland would not implement cuts to its adult disability payment and urged Westminster to protect the social security safety system rather than dismantling it.
Opposition to the Bill
The bill is expected to face strong opposition in Parliament. Reports indicate that up to 170 Labour MPs are planning to vote against the proposed changes later this month.
The government’s new proposals to increase Universal Credit payments are welcomed by many, especially single claimants over the age of 25.
However, the cuts to the LCWRA component and the freezing of health-related benefits are raising serious concerns, particularly for vulnerable individuals with disabilities.
These reforms could potentially leave millions worse off, and the bill is expected to face substantial opposition in Parliament.
FAQs
When will the Universal Credit payments increase?
The Universal Credit payments will increase starting from 2026, with annual rises until 2030, ranging from 2.3% to 4.8%.
How will the LCWRA benefit be affected?
The LCWRA benefit will be frozen at £97 per week from April 2026, and new claimants will receive just £50 per week.
Who will be exempt from reassessment under the new rules?
More than 200,000 people with severe or permanently disabling conditions will be placed in a new category that is exempt from reassessment.