The Department for Work and Pensions has formally introduced legislation to Parliament that will deliver significant changes to the Universal Credit system, including a substantial cash increase for millions of claimants.
Legislative Changes Bring Financial Boost
New legislation laid before Parliament today confirms that nearly four million households receiving the standard rate of Universal Credit will benefit from what the government describes as "the first sustained above-inflation increase" to the benefit. This represents a major policy shift in how the welfare system supports working-age claimants.
Cash Terms Increase Details
The Department for Work and Pensions has specified that the changes will mean:
- A single person aged 25 or over will receive approximately £295 extra this year in cash terms
- This increase is projected to rise to around £760 by the end of the decade
- The boost is designed to provide more financial support to those actively searching for work or already in employment
According to the DWP's official statement, this forms part of the government's broader focus on addressing cost of living pressures while encouraging workforce participation.
Reforming the Health Element
Alongside the general increase, the legislation introduces significant reforms to how Universal Credit supports those with health conditions. The Labour government has argued that the current system inherited from the previous Conservative administration creates what they term "perverse incentives."
Specifically, ministers have highlighted that under existing arrangements, people receiving Universal Credit for health reasons receive more than twice as much as a single person actively looking for work, without necessarily receiving adequate support to move closer to employment opportunities.
New Rates and Protections
The reforms, scheduled to come into force in April, will establish:
- A new lower Universal Credit health element rate of £217.26 per month for new claimants
- This compares to the current higher rate of £429.80 per month
- Important protections for vulnerable groups including those with the most severe lifelong conditions, individuals nearing end of life, and all existing Universal Credit health claimants who will continue receiving the higher rate
Broader Employment Support Investment
The Department for Work and Pensions has emphasised that these changes form part of a comprehensive package of employment support measures. In their official announcement, the department stated that the government is investing over £3.5 billion in employment support by the end of the decade.
This substantial investment aims to ensure that everyone affected by the Universal Credit changes will be offered personalised assistance to access necessary skills, progress in their careers, move into secure employment, and ultimately improve their living standards. The government positions this approach as essential for building both a growing workforce and a stronger economy for the future.
The legislation represents a significant milestone in the current administration's welfare reform agenda, balancing increased financial support for many claimants with structural changes designed to reshape incentives within the benefits system.
