Chancellor Rachel Reeves has unveiled a controversial overhaul of Universal Credit that will create a stark two-tier system for claimants with health conditions and disabilities.
What Are The New Universal Credit Rules?
The key change targets the health-related top-up, formally known as the Limited Capability for Work and Related Activity (LCWRA) element. From April 2026, the amount for most new claimants will be almost halved, dropping from £97 to £50 per week.
This drastic reduction means new applicants will receive significantly less financial support than existing claimants who already receive the LCWRA element, even if they have an identical medical condition. They will also be worse off compared to what they would have received had they applied in 2025.
In a further blow, the government has confirmed the new, lower rate will then be frozen in future years and will not rise in line with inflation, eroding its value over time. This contrasts with the standard Universal Credit allowance, which is set to increase above inflation from April.
Who Will Be Affected By The Changes?
The changes create a clear divide between existing and future claimants. Existing recipients of the LCWRA health top-up will be protected from these immediate cuts and will continue to receive their current level of support.
However, as explained by Citizens Advice, new claimants applying for support due to a long-term health condition or disability will face the reduced payments. The only exception will be for those assessed as having the most serious and lifelong conditions, who may still qualify for a higher rate.
This policy has ignited fierce criticism from campaigners and opposition MPs, who argue it establishes an unfair and divisive two-tier benefits system where the level of support depends on the date of a claim, not solely on need.
Political Backdrop and Future Implications
The move by Chancellor Rachel Reeves comes after significant political pressure. The government was reportedly forced to scale back more extensive planned benefit cuts following rebellion from within its own Labour ranks.
This compromise has resulted in a targeted cut focused on new claimants. The long-term impact means thousands of people with disabilities will manage on a permanently lower income, with the real-terms value of their support shrinking each year due to the freeze.
The controversy highlights the ongoing tension between welfare reform and providing an adequate safety net for some of the most vulnerable in society, setting the stage for further political debate as the April implementation date approaches.
