The Department for Work and Pensions this week confirmed major changes to Universal Credit, starting from April 6, 2026. While the standard allowance will see a record above-inflation increase to boost basic living standards, new claimants with health conditions face a reduction in their monthly top-up payments.

The Universal Credit standard allowance will rise by around 6.2%, combining a 3.8% inflation-linked increase with an additional 2.3% boost. This ‘rebalancing’ aims to provide greater support for everyday essentials, raising the monthly rate for single claimants aged 25 or over from £400.14 to £424.90. For those who are single and under 25, the increase will be from £316.98 to £338.58. Couples on a joint claim will see the standard allowance rise from £497.55 to £528.23 if both are under 25 and from £628.10 to £666.97 if one or both are aged 25 or above.

A major reform sees the controversial two-child limit scrapped, allowing families to claim the Universal Credit child element for all children in the household. This change will provide an extra £303.94 per month (a rise from the current £292.81) for each additional child born after April 6, 2017, who was previously excluded.

The health-related ‘LCWRA’ (limited capability for work and work-related activity) top-up is being significantly cut for new claimants, falling from the current £423.27 to just £217.26 per month to reduce a “perverse incentive” for people to declare themselves unable to work. This reduction only applies to those starting a health-related claim after the April deadline.

Existing claimants already receiving the LCWRA element will be ‘protected’ and will not see their payments decrease in cash terms. Their health top-up will increase slightly to £429.08. In an exemption from the rules, new claimants who are terminally ill or meet the Severe Conditions Criteria will still qualify for this higher amount.

Working parents will benefit from an increase in the maximum childcare cost, which rises from £1,031.88 to £1,071.09 for one child and £1,768.94 to £1,836.16 for two or more children. This ensures that larger families who are now eligible for the child element can also access the necessary support for nursery or childminder fees.

Carers will also see their elements uprated by 3.8% in line with the Consumer Prices Index. The Universal Credit carer element – which is separate from the Carer’s Allowance benefit – will increase from £201.68 to £209.34 per month, providing extra support for those looking after vulnerable family members, neighbours or friends.

Work allowances before Universal Credit deductions are applied will rise from £684 to £710 for those with no housing costs and from £411 to £427 for those whose claim includes a payment to cover some or all of their rent.

Work and Pensions Secretary Pat McFadden, said: “The benefits system we inherited was rigged with the wrong incentives and wrote people off instead of backing them. We are changing this.

“These reforms put more money in the pockets of working people on Universal Credit, while ensuring those who can work get the support they need to do so.

“By boosting the standard allowance and investing in proper employment support, we’re building a welfare system that rewards work and offers people a route to a better future.”