Government Publishes Universal Credit And Personal Independence Payment Bill - Aimed At Cutting Billions Of Pounds From Disability Benefits

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The Government has published the Universal Credit and Personal Independence Payment Bill that will formally enact the Government's some of its major proposed Green Paper welfare reforms.

The Government aims to cut the disability benefit bill by 5 billion pounds – however other analysis finds the figure will total 7 billion pounds.

The Bill makes provisions to alter or freeze the rates of Universal Credit(“UC”) and related benefits and amend the Personal Independence Payment (“PIP”) eligibility criteria. These changes “will reduce the overall cost of disability benefits over the next four years.”

Changes to UC rates

UC awards include a standard allowance, which is the core component of any award and is paid according to age and household composition. There are four rates of standard allowance: a rate for single people under 25, a couple both under 25, single people over 25 and a couple where at least one person is over 25.

The Bill will require the Secretary of State to increase the four rates of standard allowance above the rate of inflation in each of the years between 2026-27 and 2029-30. In each year the calculation will begin with the rates used in 2025-26 before applying the required increases.
For 2026-27, the rates will be the 2025-26 rates, increased by the annual increase in Consumer Prices Index (“CPI”) to September 2025, and then increased by a further 2.3%.
For 2027-28, the rates will be the 2025-26 rates increased by the annual increase in CPI to September 2025 and September 2026 and then increased by a further 3.1%.
For 2028-29, the rates will be the 2025-26 rates increased by the annual increase in CPI to September 2025, September 2026 and September 2027, and then increased by a further 4.0%.
For 2029-30, the rates will be the 2025-26 rates increased by the annual increase in CPI to September 2025, September 2026, September 2027 and September 2028, and then increased by a further 4.8%
Additional amounts are added to the standard allowance when calculating a UC award to provide for individual needs such as housing, children, caring responsibilities and having Limited Capability for Work and Work- Related Activity (“LCWRA”).

Reduction of the LCWRA element

The Bill reduces the rate of the LCWRA element of UC from 6 April 2026 for claimants newly determined to be LCWRA (subject to limited exceptions). This creates two rates for the LCWRA element, a higher pre-April 2026 rate which existing LCWRA recipients will continue to receive (and will be accessible to a small number of new recipients) and a reduced rate for new LCWRA recipients.
The policy intent of the Bill is to freeze these UC LCWRA rates, in cash terms, from April 2026 until April 2030. Accordingly, the Bill will remove the Secretary of State’s statutory duty to undertake an annual review of those amounts during the specified period.
Claimants in receipt of the UC Limited Capability for Work (“LCW”) element will continue to receive this as part of their award. UC LCW will be frozen at the 2025-2026 rate from April 2026 to April 2030, to ensure consistency with the UC LCWRA rate.

Exceptions for those with severe or terminal conditions

From April 2026 UC claimants who meet the special rules for end of life (“SREL”) criteria, and those with the most severe and lifelong health conditions or disabilities, assessed using the severe conditions criteria (“SCC”), will be entitled to a higher rate of the UC LCWRA element.
SCC claimants will also not be routinely reassessed for their UC awards.
The rate paid to these groups will be equal to the rate paid to those in receipt of the UC element prior to April 2026 and will also be frozen until April 2030.

Personal Independence Payment eligibility

Claimants will need to score at least 4 points from a single descriptor to qualify for the daily living component of PIP, as well as scoring a total of at least 8 points to get a standard level award from the Daily Living component.
Claimants will need to score at least 4 points from a single descriptor to qualify for the daily living component of PIP, as well as scoring a total of at least 8 points to get an enhanced level award from the Daily Living component.
Those claimants who have an existing PIP Daily Living component award until at least their PIP is reviewed
If at review they do not 4 points from a single descriptor then their Daily Living component award will be withdrawn 13 weeks after the review determination.

The Bill says that the date of the introduction of the above PIP rules will be set by a future statutory instrument.

It is thought that MPs will have their first vote on the Bill on 3 July 2025

The Universal Credit and Personal Independence Payment Bill is available from parliament.uk

The explanatory notes to the Bill are available from bills.parliament.uk

For more information and to track the progress of the Bill, see Universal Credit and Personal Independence Payment Bill: Originated in the House of Commons, Session 2024/2025 from parliament.uk.

DR UK's Statement on Government's Proposed Benefits Cuts

Disability Rights UK is shocked and appalled at the Government’s intended cuts to the benefits that Disabled people rely upon. Narrowing eligibility for Personal Independence Payment and reducing the health component of Universal Credit, will drive millions of Disabled people into even deeper poverty.

The Government is demonising and punishing Disabled people for the economic failures of successive governments. Why isn’t it looking to the rich, to plug its funding gap?

This is a very distressing time for Disabled people who could be impacted by the proposed changes. We will do everything we can to fight them and as part of the Disabled people’s movement, will make our voices heard.

Note:

New analysis recently published by Trussell highlights that half a million in disabled households forced into severe hardship by Green paper cuts.
A new report by the All-Party Parliamentary Group (APPG) on Poverty and Inequality concludes that the proposed cuts will disproportionate impact of poverty and inequality on Disabled people: “Disabled people already face unacceptable levels of hardship. These proposals won’t remove barriers to employment—they will add new ones by stripping people of the income they rely on to survive. The evidence is clear: these cuts will deepen inequality and force people further into crisis. We urge the government to listen to those most affected and change course immediately.”

DR UK urges Disabled people to Take Action To Oppose The Disability Benefits Cuts! - Sign The Petition, Write To Your MP