DWP confirms Universal Credit health cuts: 'This is discriminatory and will push people into poverty'

The Work and Pensions Committee had urged ministers to postpone the reduction until an independent assessment of its impact on disabled people had been completed.

This recommendation formed part of six proposals set out in the committee’s third report on the Get Britain Working green paper.

In a written response to the committee, the Department for Work and Pensions said: "The new, lower UC health element will take effect on April 6 2026."

The department added: "We will keep standard allowance rates under review."

The changes are enabled by the Universal Credit Act, which received Royal Assent on September 3 2025.

Under the new system, people who develop a disability or health condition after April 2026 will receive £54 a week in health-related Universal Credit support.

This compares with £105 a week for claimants with the same conditions who made their claim before the changes come into force.

The committee said this will create a two-tier system within Universal Credit.

Debbie Abrahams, the Labour MP for Oldham East and Saddleworth and chair of the Work and Pensions Committee, criticised the disparity.

"This is not only discriminatory, but without mitigations, will potentially push more people with disabilities and health conditions into poverty, exacerbating their condition and pushing them further away from the labour market."

She acknowledged that compromises were made during the passage of the legislation, which was originally introduced as the Universal Credit-PIP Bill.

Ms Abrahams said the committee’s concerns about fairness and long-term outcomes had not been resolved.

Labour has defended the reforms, arguing they are needed to correct what it describes as structural problems in the benefits system.

Ministers say the existing Universal Credit framework creates incentives that discourage some people from seeking work.

The DWP said the reforms are designed to encourage employment while continuing to support those who cannot work.

According to the department, the Universal Credit Act delivers the first sustained above-inflation rise in the standard allowance.

The DWP said this increase will be worth an estimated £725 a year for a single person aged 25 or over by the 2029/30 financial year.

It said nearly four million households are expected to see higher overall incomes as a result of the changes.

In its response to the committee, the department said reducing the health element for new claimants while increasing the standard allowance "addresses perverse incentives in the UC system and better encourages those who can work to enter or return to employment."

Ms Abrahams questioned whether the approach would achieve the intended outcomes.

She pointed to recent analysis suggesting that more tailored employment and health support could lead to long-term savings.

This could reduce Universal Credit health claims and increase tax receipts.

She said the analysis indicated potential savings of up to £12.5billion in DWP spending before the end of the decade.

The reforms include a number of protections for existing claimants.

People already receiving the Universal Credit health element will continue to receive the higher rate after April 2026.

Those qualifying under the Special Rules for End of Life will not be affected by the reduced rate.

The Department for Work and Pensions said people with the most severe lifelong conditions will be exempt from future reassessments.

The committee said it remains concerned about the potential impact on disabled people entering the system after April 2026.

It said the long-term effects of the changes should continue to be monitored.

The full set of committee recommendations and the Government’s response have been published on the GOV.UK website.