**DWP Issues Important Update as Universal Credit Reforms Prompt ‘Income Reduction’ Concerns**
The Department for Work and Pensions (DWP) has announced significant updates regarding the migration of claimants from income-related Employment and Support Allowance (ESA) to Universal Credit (UC), a move that has stirred both uncertainty and concern about potential reductions in financial support for vulnerable groups.
This transition, which DWP aims to complete by March 2026, was clarified in response to parliamentary questions about how disabled claimants—particularly those receiving Personal Independence Payment (PIP) and various legacy benefits—will be treated during the shift to Universal Credit’s new Health Element. The response, delivered by Sir Stephen Timms, minister for social security and disability, highlighted the government’s intention to mirror changes between ESA and Universal Credit to protect those who have not yet migrated by the official deadline.
As part of the migration, individuals categorised under ESA with Limited Capability for Work and Work-Related Activity (LCWRA) will see their support transferred to the equivalent Universal Credit Health Element. Adjustments to the ‘support component’ and both severe and enhanced disability premiums are also planned, intending to align these with the current LCWRA rates in Universal Credit. The DWP asserts this approach should secure fairness for all claimants transitioning from ESA, irrespective of when their migration occurs.
In parallel to the migration, the government has ushered in a new Bill seeking to transform the structure of Universal Credit. At its core is a permanent, above-inflation rise to the Universal Credit standard allowance, forecast to deliver an average cash increase of £725 per year for a single adult aged 25 or above by 2029/30. The Institute for Fiscal Studies (IFS) has signalled that this represents the largest real-terms boost to out-of-work support since the 1980s.
However, the reforms bring significant changes to how disability-related payments within Universal Credit are structured. The health top-up for new claimants will be reduced to £50 per week from April 2026, but individuals with the most severe or lifelong conditions—who meet stringent Severe Conditions Criteria or are considered under Special Rules for End of Life (SREL)—will remain eligible for the higher health element without repeated reassessments. Existing claimants are also protected under these provisions.
Proponents argue that these reforms will address what the DWP describes as a ‘fundamental imbalance’ in the welfare system, aiming to remove disincentives that might otherwise foster dependency rather than supporting independence. The legislation has already passed through the House of Lords and is awaiting Royal Assent—a final formality before it becomes law.
An additional measure, the ‘Right to Try Guarantee’, has been introduced to allow those with disabilities or health issues to attempt a return to work without the looming fear of losing future benefit entitlements should employment be unsustainable. This signals a shift towards supporting recovery and workforce reintegration, minister Liz Kendall commented, underlining the government’s intent to ensure both fairness and improved support for millions.
Despite these assurances, concerns remain prominent among disability rights organisations. Charities, including Sense, have warned that the changes could see future claimants with complex needs facing a significant reduction in support—potentially amounting to thousands of pounds less per year for young disabled people. Sense’s chief executive, James Watson-O’Neill, has been particularly vocal, criticising the removal of the health element for claimants under 22 and highlighting the continuing struggles of disabled people facing rising living costs.
In addressing these concerns, the DWP has pledged widespread engagement with disabled people, healthcare professionals, and advocacy groups during an ongoing ministerial review of the PIP assessment process. The aim, according to officials, is to design a more just and effective system, drawing on the expertise and experience of the disabled community.
Additionally, the government has committed to a substantial investment of £3.8 billion over the next Parliament to bolster employment support and tailored services for people with health conditions. This ‘Pathways to Work’ guarantee intends to develop further programmes that help disabled people access personalised, timely support as they enter or re-enter the workforce.
The debate over these reforms continues, with disability advocates calling for the government to co-design future benefits with those most directly affected. The pressure is on, both inside and outside Westminster, to deliver a system that combines fairness, flexibility, and financial security for the nation’s most vulnerable citizens.