Source · Select Committees · Work and Pensions Committee
Recommendation 5
5
Deferred
Welcomed UC standard allowance increases, but significant reductions for new claimants are concerning.
Conclusion
We are sympathetic to the intention behind the changes to UC rates and we agree with the importance of increasing the standard allowance. As such, we warmly welcome the desperately needed increases in the standard allowance, although we hope the Government will give serious consideration to further increases before the end of the Parliament. The Minister gave us reason to think he was keeping an open mind on this. We also welcome the decision not to freeze UC health for existing claimants. We remain concerned, however, that the significant reduction in UC health for new claimants after April 2026 will push many disabled people further into poverty and away from the labour market, even with the increase in the standard allowance. (Conclusion, Paragraph 98)
Government response summary AI-generated
The government stated it is considering responses to its Green Paper consultation on raising the age for Universal Credit Health Element access and will set out its policy direction in due course, rather than directly addressing concerns about the reduction in UC health for new claimants.
Summary of the government's response below — read the verbatim text to verify.
Government Response
Deferred
HM Government · verbatim extract
Deferred
Response The Universal Credit Act, which received Royal Assent on 3 September 2025, legislated for the first ever sustained, above inflation increase to the standard allowance, benefitting millions of people. This change, along with a reduction in the UC health element for new claimants, addresses perverse incentives in the UC system and better encourages those who can work to enter or return to employment. An updated Impact Assessment for the Bill was published in July 2025. The new, lower UC health element will take effect on 6 April 2026. We will keep standard allowance rates under review.
Read the full response on Parliament ↗