The Department for Work and Pensions (DWP) welfare overhaul, enshrined in the Universal Credit Act 2025, is being presented as a “rebalance” of Universal Credit—a modest reallocation of spending to encourage work and address purported perverse incentives in the benefits system. From April 2026, the basic Universal Credit standard allowance will be increased above inflation, while the additional payment for people with health conditions that limit their ability to work — commonly referred to as the health element (or LCWRA element) — will be roughly halved for most new claimants.
On paper, this may seem like a simple arithmetic exercise: lift the baseline for everyone and tighten targeted support. But for chronically ill and disabled Universal Credit claimants, this “rebalance” is a reckless, punitive reshaping of the welfare state that will leave many worse off, poorer, and more vulnerable.
The DWP is halving support for 750,000 chronically ill and disabled people
Under the new regime, individuals newly found entitled to the health element will see their additional Universal Credit payment cut from around £432.27 per month to just £217.26 — a reduction of nearly 50% before being frozen until at least 2029/30.
This is not a small tweak. It is a structural downgrade that treats people with significant health needs as disposable budget items. The losses are profound: for disabled people living on the margins, this payment is not a luxury, it is essential income that covers the extra costs of disability — from specialist equipment and mobility aids to heating, medications, care support, and additional transport costs.
The DWP reducing this component risks pushing more disabled people into deeper financial insecurity and poverty, undermining their dignity and autonomy. The promised standard allowance uplift simply does not offset the loss for the people who depend on the health element most — a point stressed by disability rights advocates.
Creating a two-tier welfare state
By cutting the health element for new claimants but protecting some existing recipients and those with the most severe lifelong conditions, the reforms will create a two-tiered welfare system. This means that two individuals with very similar health conditions could end up with significantly different incomes merely because of when they made their claim.
This arbitrary splitting of claimants is inherently unjust. It treats disabled people not as citizens with equal rights, but as budgetary variables to be managed. There is no moral or practical justification for punishing someone just because they develop a health condition after a certain date — their financial needs do not suddenly diminish.
A core justification from the DWP is that the previous, relatively higher LCWRA payment created “perverse incentives,” dissuading claimants from working. This view not only misreads the reality of chronic illness and disability, it ignores the structural barriers to employment faced by this group: inaccessible workplaces, discriminatory practices, transport barriers, exhaustion from symptoms, and the simple fact that many chronic conditions are fluctuating and unpredictable.
Increasing poverty, entrenching ill-health
Multiple studies show that fewer than 1 in 100 DWP Universal Credit claimants with health limitations move into employment each month, highlighting that factors beyond benefit generosity are at play. Reducing financial support does not magically transform structural inequality into job opportunities — it just makes life harder.
Cutting support for disabled people does not just strain incomes, it worsens health outcomes. Poverty and ill health are mutually reinforcing: less money means poorer nutrition, more stress, inability to afford heating or medications, and greater barriers to accessing treatment. In practice, this policy accelerates a brutal cycle where people are penalised for being sick.
Campaigners and charities have flagged that these changes could plunge many into deeper poverty and isolation, as the safety net designed to catch people when they are at their most vulnerable shrinks just when it should be most robust.
The DWP: another perverse move
By slashing the health element of Universal Credit, the DWP is not reforming welfare — it is dismantling the principle of social support for those least able to fend for themselves.
Rather than tackling the real barriers that disabled people face — from discrimination to healthcare access to workplace reform — this policy chooses to withhold income, erode dignity, and deepen inequality. A civilised society supports its most vulnerable citizens; cutting their lifeline is nothing short of a moral failure.
By Steve Topple
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