A raft of welfare cuts are planned for benefits claimants but there is one benefit which is set to increase significantly.
The DWP will hand out £775 more to one type of benefits claimant (Image: Getty)
One DWP benefit is set to be increased in the next four years following Chancellor Rachel Reeves’ spring statement. As part of its ‘biggest shake up to the welfare system in a generation’, the government recently announced a litany of cuts worth £5billion to benefits like PIP and Disability Allowance to try to get a host of people not in employment to go back into work. But among the cuts, the plan announced it will raise Universal Credit by £775 a year by 2029.
The change is aimed at stopping people from claiming the health element rate of Universal Credit by claiming they are unfit to work, which currently pays twice what the standard allowance does.
Universal Credit standard allowance will increase from £92 per week in 2025-26 to £106 per week by 2029-30, Rachel Reeves told the Commons.
The Chancellor added that the Universal Credit health element will be cut by 50% and frozen for new claimants.
She said: “The OBR (Office for Budget Responsibility) have said that they estimate the package will save £4.8 billion in the welfare budget, reflecting their judgments on behavioural effects and wider factors.
“This also reflects final adjustments to the overall package, consistent with the Secretary of State’s statement last week and the Government’s Pathways to Work Green Paper.
“The universal credit standard allowance will increase from £92 per week in 2025-26 to £106 per week by 2029-30, while the Universal Credit health element will be cut by 50% and then frozen for new claimants.”
The broader plans, released via gov.uk last week, outlined: “Rebalancing payment levels in Universal Credit to improve the Standard Allowance. Raising it above inflation by 2029/30, adding £775 annually in cash terms. By improving the Standard Allowance to provide more adequate support.
“The government plans to raise the Standard Allowance above inflation by 2029/30, adding £775 in cash terms annually.
“This aims to avoid people having to choose between employment or adequate financial support.
“This change addresses the current issue where the health element rate is double that of the standard allowance, creating an incentive for people to prove they are unfit to work to claim the health element and access greater financial support.
“The UC standard allowance increase of £775 per year is for a single person aged 25 or over. Equivalent percentage increases will be applied to the standard allowances of couples and those aged under 25.”
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Work and Pensions Secretary Liz Kendall said: “Our social security system must be there for all of us when we need it, now and into the future. That means helping people who can work to do so, protecting those most in need, and delivering respect and dignity for all.
“Millions of people have been locked out of work, and we can do better for them. Disabled people and those with health conditions who can work deserve the same choices and chances as everyone else.
“That’s why we’re introducing the most far-reaching reforms in a generation, with £1 billion a year being invested in tailored support that can be adapted to meet their changing circumstances – including their changing health – while also scrapping the failed Work Capability Assessment.
“This will mean fairness for disabled people and those with long-term health conditions, but also for the taxpayers who fund it as these measures bring down the benefits bill.”
