Chancellor of the Exchequer Rachel Reeves has confirmed that significant changes to the Universal Credit system will come into effect this year, creating a two-tier system for claimants with health conditions and disabilities.
What Are The New Universal Credit Rules?
The most controversial change involves a substantial reduction to the health element of the benefit, known officially as the Limited Capability for Work-Related Activity (LCWRA) element. For the majority of new claimants, this crucial top-up payment will be effectively halved from April 2026.
Currently set at £97 per week, the amount will be slashed to just £50 a week for most new applicants. The Government has stated that individuals with the most severe and lifelong conditions will be exempt from this cut. Furthermore, the reduced rate will then be frozen in future years, meaning it will not increase in line with inflation.
A Two-Tier System For Claimants
In a key detail that has sparked debate, existing claimants will be protected from the reduction. This protection came after Labour rebels forced the Government to modify its original, broader welfare cut plans.
This creates an immediate disparity where two people with the same disability or health condition will receive different levels of financial support, solely based on when they made their claim. New claimants will not only receive less than existing ones but also less than they would have in previous years.
Citizens Advice has issued guidance, explaining: "You might be affected by the April 2026 changes if you get the additional amount because you have a long-term health condition or a disability. This payment is called the 'limited capability for work-related activity' (LCWRA) element. The amount is decreasing for most people who aren’t already getting it."
Context And Wider Benefit Changes
While the health top-up is being cut, the Government has pointed out that the Universal Credit standard allowance will rise above inflation from April. However, for those reliant on the LCWRA element, this rise is unlikely to offset the sharp reduction in their specific health-related support.
The confirmation by Chancellor Rachel Reeves solidifies a major shift in the welfare landscape, drawing a clear line between those already receiving support and new applicants. The changes are set to significantly impact the budgets of future claimants with disabilities, raising concerns about the adequacy of support for living costs.
