What’s the latest on welfare reforms? April 2026

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PIP reforms

The government had proposed changing the qualifying rules for Personal Independence Payment (PIP), but these changes will not now go ahead. Instead, Sir Stephen Timms is reviewing PIP and will report to the government by autumn 2026.

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Cutting the Universal Credit health element – April 2026

From 6 April 2026, the Universal Credit health element (also called the limited capability for work and work-related activity, or LCWRA, element) has been reduced for many new claimants.

For most new claimants, this payment has fallen from £429.80 to £217.26 a month. The lower rate is also frozen, so it will not rise with inflation for four years.

People already getting Universal Credit with the LCWRA element, and those who are terminally ill, will continue to receive the higher rate.

New claimants may still get the protected higher health element if they meet the new “severe conditions” test. To qualify, both of the following must apply:

• You must have a lifelong condition diagnosed by an NHS practitioner (ministers have said a private diagnosis also counts if the NHS accepts it);
• At least one LCWRA descriptor applies to you “constantly” and for the rest of your life.

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Proposal to cut the Universal Credit health element for under 22s

The government has proposed removing the Universal Credit health element for people under 22. This would mean young adults with LCWRA would receive only the standard allowance, with no extra health-related amount, until they turn 22. The Minister for Work and Pensions has suggested there may be exceptions for some groups of young people.

The government consulted on this proposal in summer 2025 but has not yet confirmed its final plans.

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Raising the age at which you claim PIP to 18 – unconfirmed

The government has proposed raising the minimum age to claim PIP in England and Wales from 16 to 18. This would also delay the point at which young people on Disability Living Allowance (DLA) are invited to claim PIP.

A consultation took place in summer 2025, but the government has not yet confirmed its final plans or when any change would take effect.

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Scrapping of the two-child limit – from April 2026

If you claim Universal Credit, you usually receive a child element for each dependent child in your household. Previously, families did not get this for a third or later child born after 6 April 2017. This two-child limit has now been removed.

As a result, larger families can receive higher Universal Credit payments from April 2026. However, some families who currently get transitional elements may see no overall increase, because the extra child element may reduce their transitional element.

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Increase in Carer’s Allowance earnings limit – from April 2026

The Carer’s Allowance earnings limit has risen from £196 to £204 a week.

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Changes to DWP health assessments – from April 2026

From April 2026, the Department for Work and Pensions (DWP) plans to carry out more Work Capability Assessment reassessments. More PIP and Work Capability Assessments will also be done face to face with a health professional.

On the positive side, fewer people will be called for PIP reassessments where their needs have not changed.

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Cutting tax breaks under the Motability Scheme – from July 2026

From July 2026, vehicles leased through the Motability Scheme, or similar qualifying schemes, will be charged VAT on any top-up “advance payment” for a more expensive vehicle. Insurance Premium Tax will also apply to leased vehicles under the scheme for the first time.

These changes are likely to increase leasing costs for some people. However, the insurance changes will not apply to vehicles designed for, or substantially and permanently adapted for, wheelchair or stretcher users. Some premium car brands are also being removed from the scheme.

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Extension of free school meals to all Universal Credit claimants in England – from September 2026

At present, whether a family on Universal Credit qualifies for free school meals depends on household income. From September 2026, all Universal Credit claimants in England will qualify regardless of income.

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Right to try work – at some point in 2026/27

The government plans to introduce a legal right for disabled people to try work without this automatically being treated as a change of circumstances.

This should mean that trying work does not trigger a reassessment of disability benefits or of LCWRA status for Universal Credit or Employment and Support Allowance (ESA).

However, if the work you do appears inconsistent with the difficulties you described in your ESA, UC or PIP claim, your benefits could still be reviewed.

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Scrapping the Work Capability Assessment – from 2028

The government still plans to scrap the Work Capability Assessment. In future, entitlement to the Universal Credit health element would depend on qualifying for PIP or Adult Disability Payment, rather than being found to have LCWRA.

More detail on this planned rule change is still awaited.

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Scrapping ESA and JSA – from 2028

The government plans to introduce a new contributory benefit to replace contributory ESA and contribution-based Jobseeker’s Allowance (JSA). It would:

• Be time-limited;
• Not include a health assessment;
• Require enough National Insurance contributions or credits; and
• Be available to self-employed people as well as employees.

We will advise myaware members about these changes as and when we know more.