The Government said the reforms, which include a lower Universal Credit health element rate of £217.26 per month for new claimants, compared to the higher rate of £429.80, will save taxpayers around £1bn.
Those with the most severe, lifelong conditions, those nearing end of life, and all existing Universal Credit health claimants will continue to receive the higher rate.
Anyone affected by the changes to Universal Credit will be entitled to voluntary employment support, with more than 65,000 people with limited capability for work and work-related activity taking up the offer since March 2025 – exceeding the target.
The changes will also see almost 4m households on the standard rate of Universal Credit receive a boost worth around £295 extra this year in cash terms, around £110 above inflation, for a single person aged 25 or over.
Minister for social security and disability Sir Stephen Timms said: ‘Simultaneously boosting the standard allowance and investing £3.5bn in employment support means we're creating a welfare system that backs people to work and helps them build a better future.'
Those with limited capability for work or work-related activity will see a new notification on their Universal Credit account giving information on the support available and allowing them to opt in to being contacted to find out more about the support.
This will trigger a conversation with a Pathways to Work adviser, who can offer personalised appointments and refer individuals to programmes such as Connect to Work, WorkWell, or local Trailblazer schemes.
The changes come alongside the £3.5bn investment the Government is making to help disabled people and those with long-term health conditions move closer to the labour market, offering personalised support aimed at improving employment and living standards.
This includes the Connect to Work programme, which will provide tailored help to 300,000 people over the next five years, and the WorkWell programme, set to support a further 250,000 people to stay in or return to work.
