DWP confirms Universal Credit changes for millions in April | Personal Finance | Finance

The Department for Work and Pensions (DWP) has delivered an update affecting those who face substantial changes to their benefits next April. The DWP has outlined its commitment to finalise the transfer of those claiming income-related Employment and Support Allowance (ESA) onto Universal Credit by March of next year. Sir Stephen Timms, Minister for Social Security and Disability, has also confirmed that this transition will include shifting ESA recipients to the Universal Credit Health Element.

These statements emerged through a written parliamentary reply to Labour MP Amanda Martin, who had enquired whether disabled claimants receiving Personal Independence Payment (PIP) alongside legacy work-related benefits would be “treated as new claimants for the purposes of the proposed changes to the Health Element of Universal Credit when they are migrated”. The Portsmouth North representative additionally questioned whether people on legacy benefits moving to the Universal Credit framework would “see a reduction in their income as a result of these proposed changes”.

When the Universal Credit migration will be completed

Responding to these concerns, the DWP Minister explained: “The Department plans to complete migration of ESA claimants to Universal Credit by March 2026. As part of this ESA claimants will be migrated to the Universal Credit Health Element. To protect any claimants who have not migrated by April 2026 we intend to mirror as closely as possible the changes made in Universal Credit in the ESA rates.

“Changes to the ‘support component’ and the two disability premia (severe and enhanced disability premium rates) will reflect changes to Universal Credit LCWRA ( Limited Capability for Work and Work-Related Activity) rates for existing claimants.” He further stated: “Including these commensurate measures aims to give fair treatment for all customers moving onto Universal Credit from income related ESA, regardless of their point of migration.”

The DWP has previously announced that nearly 4 million households are set to see an annual income boost estimated to be worth £725 under a new Bill designed to revamp the welfare system, reports the Daily Record. The proposed reforms in the Universal Credit Bill aim to rebalance the core payment and health top-up in Universal Credit.

The Bill proposes a permanent rise above inflation for the Universal Credit standard allowance, amounting to £725 by 2029/30 in cash terms for a single person aged 25 or over. According to the Institute for Fiscal Studies (IFS), this represents the highest permanent real-terms increase to the main rate of out-of-work support since 1980.

The Universal Credit Bill

The DWP stated that the rebalancing of Universal Credit health and standard elements is intended to address the fundamental imbalance in the system which creates incentives that drive people into dependency through:

• Ensuring that all existing recipients of the Universal Credit health element – and any new claimant meeting the Severe Conditions Criteria and/or that has their claims considered under the Special Rules for End of Life (SREL) – will receive the higher Universal Credit health payment after April 2026.
• Increasing the Universal Credit standard allowance above inflation for the next four years – worth an estimated £725 by 2029/30 for a single adult aged 25 or over.
• Reducing the health top-up for new claims to £50 per week from April 2026.
• Exemptions from reassessment for those with the most severe, lifelong conditions.

The DWP said the reforms will tackle the ‘fundamental imbalance in the system which creates perverse incentives that drive people into dependency’. The Bill successfully passed through the House of Lords on Tuesday and now awaits Royal Assent.

Alongside these developments, the DWP has unveiled substantial new measures, granting people receiving health and disability benefits the right to try work without fear of reassessment. The new ‘Right to Try Guarantee’ encompasses people with a disability or health condition – such as those recovering from illness – who wish to return to employment now their health has improved.

Work and Pensions Secretary Liz Kendall said: “Our reforms are built on the principle of fairness, fixing a system that for too long has left people trapped in a cycle of dependence. We are giving extra support to millions of households across the country, while offering disabled people the chance to work without fear of the repercussions if things don’t work out.

“These reforms will change the lives of people across the country, so they have a real chance for a better future.”

Safeguards for disabled people

The Bill also outlines measures to safeguard the most vulnerable and severely disabled, including 200,000 in the Severe Conditions Criteria group – individuals with the most severe, lifelong conditions who are unlikely to recover – will not be called for a Universal Credit reassessment. All existing recipients of the Universal Credit Health Element, as well as new customers with 12 months or less to live or who meet the Severe Conditions Criteria, will see their standard allowance combined with their Universal Credit health element rise at least in line with inflation every year from 2026/27 to 2029/30.

The DWP stated: “This means they can live with dignity and security, knowing the reforms to the welfare system mean it will always be there to support them.” Furthermore, the DWP is placing disabled individuals at the centre of a ministerial review of the PIP assessment led by Disability Minister Sir Stephen Timms.

This review will be co-produced with disabled people, along with the organisations that represent them, experts, MPs and other stakeholders – ensuring it is fair and fit for the future. The DWP added: “We will be engaging widely over the summer to design the process for the review and consider how it can best be co-produced to ensure that expertise from a range of different perspectives is drawn upon.

“These reforms are underpinned by a major investment in employment support for sick and disabled people – worth £3.8 billion over the Parliament. Funding will be brought forward for tailored employment, health and skills support to help disabled people and those with health conditions get into work as part of our Pathways to Work guarantee.”

The DWP added: “This investment will accelerate the pace of new investments in employment support programmes, building on and learning from successes such as the Connect to Work programme, which are already rolling out to provide disabled people and people with health conditions with one-to-one support at the point when they feel ready to work.”

Concerns raised over the new bill

Nevertheless, charities have expressed worries over the broader consequences of the new Bill. James Watson-O’Neill, Chief Executive at Sense, said: “Disabled people with complex needs often face the greatest barriers to work and are already struggling – and now future claimants will be forced to live on thousands of pounds less each year.

“We’re grateful to everyone who campaigned to secure important concessions on this bill, but we remain deeply concerned about the impact these changes will have on disabled people who claim Universal Credit in the future. When over half of disabled people with complex needs who rely on benefits can’t afford essential bills, cutting support should never have been on the table.

“We want the government to scrap its proposal to remove the health-related element of Universal Credit for disabled people under 22. This would leave thousands of young disabled people with complex needs £100 a week worse off – an unacceptable blow to those who already face significant barriers and extra costs.

“The government has promised to tackle the barriers preventing disabled people from entering employment – such as negative attitudes from employers, the lack of assistive technology in JobCentres, and the unlawful denial of reasonable adjustments. We welcome this commitment, but we will hold the government to account to ensure these changes are delivered effectively and in genuine collaboration with disabled people.

“Any future benefits reforms must be co-produced with disabled people. We have the ideas and expertise as disabled people, and as organisations working alongside disabled people, to make the benefits system fairer and more effective – now it’s time for the government to listen.”