Britain

Labour Announces Major Welfare Reforms Including Universal Credit Overhaul

by Mohammed Ahmed
written by Mohammed Ahmed

The Labour Party has unveiled significant welfare reforms, including changes to Universal Credit and disability benefits. Work and Pensions Secretary Liz Kendall announced the measures, aimed at simplifying the benefits system and encouraging people back into work.

Universal Credit and Employment Support Changes
The government plans to merge Jobseeker’s Allowance (JSA) and Employment and Support Allowance (ESA) into Universal Credit. Additionally, the Work Capability Assessment (WCA) will be scrapped by 2028. The standard Universal Credit allowance will rise by £775 in the 2029/30 financial year.

A “right to try” initiative will be introduced, allowing claimants to attempt a return to work without losing their benefits. The government also intends to rebalance Universal Credit payments from April next year, holding the value of the health top-up fixed for existing claimants and reducing it for new applicants. An additional premium will be introduced for those with severe lifelong conditions.

Reforms to Personal Independence Payments (PIP)
The government has confirmed that PIP will remain in place and will not be frozen following concerns raised by Labour MPs. However, the eligibility criteria will be tightened, requiring claimants to score at least four points in one activity to qualify. The government expects these changes to save £5bn annually by the end of the decade.

Employment Support Funding
A £1bn annual investment in employment support was also announced. The government will consult on whether to delay the health top-up for Universal Credit claimants under 22, with the savings redirected to work support and training programmes.

Kendall described the existing WCA system as “complex” and “time-consuming,” adding that those with the most severe disabilities and health conditions will not need to undergo reassessments for work suitability.