In a significant overhaul of the welfare system, the Department for Work and Pensions (DWP) is set to implement sweeping reforms that will slash disability payments within Universal Credit by half, projecting savings of £950 million for taxpayers by 2030. The new legislation, laid before Parliament, targets what the government describes as "perverse incentives" that have historically discouraged employment and trapped individuals in long-term benefit dependency.
Substantial Cuts to Disability Support
From April 2026, new claimants assessed as having a limited capability for work-related activity (LWCRA) will face a dramatic reduction in their monthly health element payments. This crucial component of Universal Credit will be nearly halved, dropping from £429.80 to just £217.26 per month after the scheduled April increase is applied. This move forms the cornerstone of the government's strategy to rebalance the benefits system, prioritising financial support for those actively engaged in work while ensuring the overall sustainability of welfare provisions.
Protections for Existing Claimants
While new claimants will bear the immediate brunt of these cuts, existing recipients will be shielded from direct cash reductions until 2029, with their current payment levels frozen. However, this freeze means that over time, these individuals may experience a real-terms decrease in their income as benefits fail to keep pace with inflation, potentially eroding their purchasing power and financial stability.
A carefully defined "protected cohort" will be exempt from these reductions entirely. This group includes terminally ill individuals and those with severe, lifelong conditions who will continue to receive the higher payment rate. Furthermore, they will be spared from future reassessments, offering them enhanced financial security and mental peace during challenging circumstances.
Investment in Employment Support
To mitigate the impact of these changes and facilitate the transition into work, the government is committing over £3.5 billion towards tailored employment assistance by the end of the decade. This substantial investment will fund the recruitment of 1,000 dedicated work coaches who will provide voluntary, specialised support to individuals with health conditions, aiming to bridge the gap between benefit dependency and sustainable employment.
Boosting Incomes for Working Families
Concurrently, the standard allowance for all Universal Credit households will receive a sustained above-inflation increase, directly benefiting approximately four million families across the nation. This measure is designed to narrow the financial disparity between those receiving health-related benefits and those actively seeking or engaged in work, reinforcing the government's emphasis on employment as the primary route to financial improvement.
Addressing Assessment Backlogs
Operational reforms will also see an increase in face-to-face assessments to tackle the inherited backlog of Work Capability Assessments. The government asserts that this enhanced approach will ensure that financial support is more accurately targeted towards those with the greatest need, improving the overall efficiency and fairness of the welfare system.
Criticism from Disability Advocates
Despite these measures, the proposed cuts have sparked considerable concern among disability charities and critics who warn that reducing support could plunge thousands of vulnerable households into severe hardship. They argue that the health element serves as a vital lifeline, covering the substantial extra costs associated with living with a disability, from specialised equipment to increased energy bills and transportation expenses.
Work and Pensions Secretary Pat McFadden has defended the reforms, stating that the benefits system inherited by the Labour government was "rigged with the wrong incentives and wrote people off rather than backing them." The government maintains that these changes are essential to create a fairer, more sustainable system that better supports both claimants and taxpayers in the long term.
