The Department for Work and Pensions (DWP) is rolling out significant changes to Universal Credit payments starting 6 April 2026, resulting in an increased annual payout of up to £2,550 for many claimants. This revision introduces two distinct Limited Capability for Work and Work-Related Activity (LCWRA) rates: a higher rate of £429.80 per month and a lower rate of £217.26 per month.
The lower rate will apply to most new claimants from that date and will remain frozen until April 2030, effectively reducing its real value over time due to inflation. The higher rate, reflecting the current LCWRA amount uprated for inflation, is reserved for claimants already receiving LCWRA by 6 April 2026 as well as individuals in designated protected groups. This higher amount will continue to increase annually with inflation, ensuring ongoing support.
The £212 monthly difference between the two rates equates to £2,550 per year, representing a substantial benefit for those eligible. New LCWRA claimants in protected groups will also qualify for the higher rate, regardless of when they begin receiving payments.
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Sir Stephen Timms, Labour Party Minister for Social Security and Disability, emphasized the reforms: “The welfare system we inherited has for too long locked disabled people and those with long-term conditions out of work. These new laws reduce projected Universal Credit expenditure by nearly £1 billion while boosting the standard allowance and investing £3.5 billion into employment support. We’re building a welfare system that helps people access work and create better futures.”
From 8 April 2026, Universal Credit recipients with limited capability for work or work-related activity will receive notifications on their accounts outlining available support, with the option to opt-in for further assistance in finding employment.
Previously, individuals receiving the health-related Universal Credit top-up earned more than twice the standard single claimant rate without access to support aimed at improving employment prospects. The changes aim to address this imbalance.
In addition to LCWRA changes, the DWP has removed the ‘two-child limit’ from 6 April 2026, allowing claimants to receive child elements for all their qualifying children, including families with three or more children, enhancing overall support for families on Universal Credit.
These reforms are part of a broader £3.5 billion government investment focused on enabling disabled people and those with long-term health conditions to move closer to the labor market with personalized support designed to improve employment opportunities and living standards.