The shake-up comes as Labour moves ahead with its plans to cut benefit spending by billions of pounds by pushing more people back into work – but what exactly could be announced today?
The government will publish its long-awaited plans to change disability benefits in the UK today. The shake-up comes as Labour moves ahead with its plans to cut benefit spending by billions of pounds by pushing more people back into work. Overall, the government currently spends £65billion a year on health and disability-related benefits and this is projected to increase to £100billion by 2029.
Liz Kendall will make an announcement today at 12:30pm. ITV last week published a leak on proposals, which mainly focused on the disability benefit Personal Independence Payment (PIP) – although some changes are also expected for Universal Credit. This leak divided Labour MPs with some voicing concerns on the impact on vulnerable claimants.
Some of the changes put forward include imposing stricter criteria for PIP and altering the health element of Universal Credit. Here, we explain everything you need to know about Universal Credit, the changes that have been proposed, and how these could impact you.
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What is Universal Credit?
Universal Credit is the largest working-age benefit and according to the latest DWP data, it is paid to 7.5 million people. You can claim Universal Credit from the DWP if you are unemployed or you are working but on a low income. There is no set level for how much money you get every month – what you get is dependent on your personal circumstances which include things like age, whether you live in a couple, and whether you have children.
However, there is a base rate for Universal Credit, and that’s called the “standard allowance”. Then, if you’re eligible, you can get additional payments to support other costs. These are all applied to give your total figure before any deductions are then made based on whether you work, have savings, and other measures. These rates are rising from April 2025, and below is the current rate – alongside what it will rise to next from next month:
- Single under 25: £311.68 a month to £316.98 a month
- Single 25 or over: £393.45 a month to £400.14 a month
- Joint claimants both under 25: £489.23 a month to £497.55 a month
- Joint claimants, one or both 25 or over: £617.60 a month to £628.10 a month
If you have children, you can claim more, and the rate varies depending on how many children you have – if you have a disabled child, then you are also eligible for added support.
What are the working rules around Universal Credit?
Regarding working, your Universal Credit claim will be placed into either one of four work activity groups, highlighting what you should be doing to keep your Universal Credit claim. According to Citizens Advice, these include:
- No work-related requirements group – You don’t have to do anything to prepare or look for work
- Work-focused interview group – You have to go to regular meetings with your work coach
- Work preparation group – You have to meet your work coach regularly and also prepare for work. This includes things like writing a CV and going on training or work experience
- All work-related activity group- You have to do all you can to find a job or earn more. This includes looking for jobs, applying for jobs and going to interviews
For people who are fit to work, the DWP places claimants into groups known as “Light Touch” and “Intensive Work Search” and the Government’s Administrative Earnings Threshold (AET) determines which group a person is placed into. It is based on how much they earn per calendar month with those above the threshold falling within the light touch group and those below into the intensive work group. If you fall into the latter, you need to work more to keep your benefits.
Currently, claimants who have health conditions or disabilities have to undergo a Work Capability Assessment to decide whether they’re capable of working and if they’re eligible for cash top-ups when they claim Universal Credit. These top-up payments are called the limited capability for work and work-related activity (LCWRA) payments – these are the current rates and how much they will be rising to in April:
- Limited capability for work: £156.11 a month to £158.76 a month
- Limited capability for work or work-related activity: £416.19 a month to £423.27 a month
Universal Credit claimants can also be given a work allowance which sets how much they can earn through work before their Universal Credit is cut. However, it is normally only available to those who have responsibility for a child or have a disability or health condition that affects their ability to work. Under the rules, your Universal Credit payment is cut by 55p for every £1 earned above the work allowance.
What changes to Universal Credit could be announced?
The Government announced in its Autumn Statement that it was going to make changes to the Work Capability Assessment. Under the proposed changes, the LCWRA payment will be scrapped and replaced with a new health element. However, new leaks suggest that this payment could be frozen or even cut entirely.
This could mean everyone claiming Universal Credit must look for work. Currently, more than three million Universal Credit recipients have no requirement to find work. The government are set to spend around £1billion on getting the long-term sick “back to work”. Recently, the DWP announced 1,000 work coaches are set to be deployed to jobcentres across the UK to help sick and disabled people find employment.
Alongside this, it has been reported that Universal Credit claimants who are looking for work could see a boost in their payments – although this is rumoured again. It has also been reported that ministers are considering a ‘right to try’ policy which would see disabled benefit claimants able to retain their benefits should they undertake employment that does not become long-term.
The Secretary of State for Work and Pensions, Liz Kendall, says that the reforms would not impact those with the most “severely disabled”. She told MPs: “We know there are always people who cannot work because of the nature of their disability or health condition, and those people will be protected.”
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