Universal Credit Reforms: Four Groups to Receive Higher Payment Rate from April
The Department for Work and Pensions has confirmed significant changes to Universal Credit payments that will take effect from April this year. Under the new system, four specific groups of claimants will continue to receive the higher rate of the health element, while new claimants will be subject to a reduced payment structure.
New Payment Structure Details
The reforms will introduce a lower Universal Credit health element rate of £217.26 per month for new claimants. This represents a substantial reduction from the higher rate of £429.80 per month that will continue to be available to qualifying individuals. The changes are part of broader adjustments to the welfare system aimed at targeting support more effectively.
Who Qualifies for the Higher Rate?
The DWP has identified four key groups who will maintain access to the higher payment rate:
- Individuals with the most severe and lifelong medical conditions
- Those who are nearing the end of their life
- All existing Universal Credit health claimants regardless of when they made their claim
- Those meeting the Severe Conditions Criteria or subject to Special Rules for End of Life provisions
These groups will continue to receive the Limited Capability for Work and Related Activity (LCWRA) rate, which is set to increase from £423.27 in the 2025/56 period to £429.80 in 2026/27.
Financial Impact and Employer Concerns
The higher rate represents a significant financial boost for eligible claimants. For a single person aged 25 or over, the increase is worth approximately £295 extra this year in cash terms, or around £110 above inflation. By the end of the decade, this rises to £760 in cash terms, representing approximately £250 above inflation.
However, concerns have been raised about the support available to employers. Colin Crooks MBE, CEO at Intentionality, highlighted what he sees as an imbalance in the system. "These reforms invest billions in getting people job-ready, but offer nothing to employers willing to take the risk," he stated.
Crooks continued: "Without matched support for businesses – covering the real costs of supervision, training, and pastoral care – and without assessing whether employers have the empathy and infrastructure to support people with complex needs, we're setting both parties up to fail. Small businesses can't bridge this gap on goodwill alone."
Success Stories and Future Prospects
The DWP shared positive feedback from claimants who have benefited from similar support structures. One individual, Hayden, spoke about his experience with the Pathways to Work programme. "My Pathways to Work adviser saw my potential, not my limitations," he explained.
"They found me the right course, and made sure I had everything I needed to succeed. I'm now training to become a Personal Trainer – something I never thought possible. This support has genuinely transformed my future."
The reforms represent a significant shift in how Universal Credit supports individuals with health conditions, with the government aiming to balance financial support with employment opportunities while addressing concerns from both claimants and employers about the practical implementation of these changes.
