Major changes to Universal Credit in 2026 include increased standard allowance but halved health payments for new claimants with disabilities
Significant changes to Universal Credit are on the horizon for next year, with millions of claimants set to be affected.
Universal Credit supports over eight million people across the UK and is administered by the Department for Work and Pensions ( DWP ).
Among the alterations is an increase to the standard allowance – the baseline sum recipients obtain through Universal Credit prior to any extra payments or deductions being applied.
However, substantial reductions are also planned for the health-related component affecting new Universal Credit claimants, reports the Mirror.
More people being moved to Universal Credit
The vast majority of older legacy benefits are being phased out in favour of Universal Credit, with the final cohort due to transition by the end of March 2026.
Universal Credit is superseding Tax Credits, Income-based Jobseeker’s Allowance, Income Support, Income-related Employment and Support Allowance and Housing Benefit.
Those required to switch to Universal Credit will receive a “migration notice” through the post, providing a three-month window to begin their Universal Credit claim.
Certain circumstances will allow old benefits to remain in place – for instance, Housing Benefit can still be claimed if you’re residing in supported or temporary accommodation.
Universal Credit standard allowance to rise
From next April, the Universal Credit standard allowance will climb by 6.2 percent – outpacing the current rate of inflation. For a single person aged 25 and over, the standard allowance will jump from £92 to £98 per week.
For couples, the increase will see their weekly allowance rise from £145 to £154. The Department for Work and Pensions (DWP) projects that by 2029, above-inflation increases will enhance the average standard allowance by £775 in cash terms.
Universal Credit sickness payment halved and frozen for new claimants
The Limited Capability for Work and Work-Related Activity (LCWRA) is the health component of Universal Credit. It offers additional monthly payments for those with health conditions or disabilities that restrict their ability to work.
Currently, the amount stands at £97 a week – but from April 2026, new claimants awarded LCWRA will only receive £50 a week. This amount will then be frozen until the 2029/30 financial year.
Existing claimants will have their top-up frozen at £97 a week until 2030, with no annual increases. By 2030, the LCWRA element will be completely phased out and replaced with a new health element linked to Personal Independence Payment (PIP).
New Severe Conditions Category introduced
A new subgroup within the LCWRA, known as the Severe Conditions Category (SCC), will be introduced in April 2026 for individuals with the most severe, lifelong disabilities and illnesses. Those in the new SCC will receive the higher, current rate of the LCWRA element.
Furthermore, they will be exempt from routine reassessments for this element. It’s understood that claimants will not be assessed based on their condition, but rather on how it affects them.
