Universal credit health benefit reform sees cut for new claimants this week
The government said benefits changes from this week would reform a system that “for too long has left disabled people and those with long-term health conditions out of work”.
The reforms will tackle what ministers call “perverse incentives”, which they say encourage people to take advantage of benefits without getting support to start a job.
From Monday, new claimants for the health element of universal credit (UC) will receive a lower rate of £217.26 per month.
Universal credit is a payment to cover living expenses and is available to people who are working, low-income, unemployed or unable to work.
People with the most severe lifelong health conditions, people nearing the end of life and all existing UC health claimants will continue to receive the higher monthly fee of £429.80.
The government said the change would save taxpayers around £1bn.
Statistics published last month showed there were 2.7 million people assessed as having limited capacity for work and work-related activity (LCWRA) in England, Scotland and Wales at UC.
People in this category are not required to engage in any interviews or work-related activities.
The government has promised that investment in personalized employment support can provide opportunities for people, supporting them to get and stay in work “rather than leaving people dependent on benefits”.
Also this week, the UC standard rate will be increased in what ministers say is an effort to “lower the cost of living”.
It said this would result in around four million households receiving around £295 extra in cash this year over the standard UC charge.
Social Security and Disability Minister Sir Stephen Timms said: “For too long the benefits system we inherited has left disabled people and people with long-term conditions unemployed.
“Laws coming into force today will change this and reduce projected spending on universal credit by almost £1bn.
“Simultaneously increasing the standard allowance and investing £3.5bn in employment support means we are creating a welfare system that supports people into work and helps them build a better future.”
Last year ministers were forced to abandon plans to also reform disability benefits, including for those with mental health problems, in the face of backbencher opposition from Labour.
Rather than urgent reform, the Timms review is seeking views on personal independence payment (Pip) and how it works.
Ministers have promised that any changes to the benefit, which helps with extra living costs for people with long-term physical or mental health conditions or disabilities who have difficulty doing certain daily tasks or have limited mobility due to their condition, will be delayed until this happens.
The review is expected to be submitted to Work and Pensions Minister Pat McFadden by the autumn; The government stated that a temporary update would come before this.
