Universal Credit Set at £217.26 for New Claimants
The UK government has unveiled new legislation aimed at tackling what it describes as “perverse incentives that discourage work” within the welfare system. The reforms will significantly affect Universal Credit, particularly its health element and standard allowance, with changes set to take effect from April.
Universal Credit Health Element to Be Cut for New Claimants
One of the most significant changes involves a sharp reduction in the health element of Universal Credit for new claimants. The monthly payment will be reduced from £429.80 to £217.26, representing a cut of £212.54 per month.
However, the government has stressed that the reduction will not apply to everyone. People with the most severe and lifelong health conditions, those nearing the end of their lives, and all existing Universal Credit health claimants will continue to receive the higher rate.
The Department for Work and Pensions (DWP) said the reform is intended to address disparities in the system. According to the department, people receiving Universal Credit for health reasons are currently paid more than twice as much as a single person actively looking for work, while often not receiving enough tailored support to help them move into employment.
Standard Universal Credit Allowance to Rise
Alongside the cuts, the government has announced a boost to the standard Universal Credit allowance. From April, the allowance will increase by nearly £300 per year, benefiting almost four million households.
Officials say this marks the first sustained above-inflation increase to Universal Credit. For a single person aged 25 or over, the rise will be worth around £295 extra per year in cash terms, increasing to approximately £760 by the end of the decade.
Government and Expert Reactions
Work and Pensions Secretary Pat McFadden described the reforms as an effort to fix a “rigged” welfare system and better support people into work.
However, experts have warned that the changes alone may not be enough. Kate Underwood, founder of Southampton-based Kate Underwood HR and Training, said the reforms will not automatically make people “work-ready.”
She warned that small and medium-sized businesses are likely to see more job applicants with health conditions who may require flexible working arrangements, phased returns, or reasonable workplace adjustments.
“This only works if employers stop pretending humans are machines,” she said. “Otherwise, you’ll just see more churn, more absence and more risk.”
Existing Claimants Protected
The DWP has reiterated that existing claimants receiving the health element of Universal Credit will continue to receive the higher rate, alongside those with the most severe conditions. The government says further employment and skills support will accompany the reforms to help affected individuals move into suitable work.
