The government is pressing ahead with major welfare reforms designed to encourage more people into work, as new Universal Credit legislation is formally laid in Parliament today

(Monday 9 February).

The changes are intended to rebalance a benefits system ministers say has long discouraged employment, while expanding tailored support to help people with health conditions move closer to — or into — work.

Ending “perverse incentives” in the welfare system

Under the current system, a single person receiving Universal Credit for health reasons can be paid more than twice as much as someone actively seeking work, often without receiving meaningful help to find employment. Ministers argue this has trapped many people on long-term benefits.

From April, the reforms will introduce a lower health element rate of £217.26 per month for new Universal Credit claimants, replacing the higher rate of £429.80.

Existing health-related claimants will continue to receive the higher payment, as will people with severe or lifelong conditions and those nearing the end of life.

The government says the changes will narrow the gap between payments for people who can work and those actively looking for employment, while ensuring the most vulnerable remain protected.

£3.5 billion investment in employment support

Alongside the benefit changes, the government is committing more than £3.5 billion to employment support by the end of the decade. Everyone affected by the reforms will be offered personalised help to build skills, gain confidence, and move into secure work.

More than 1,000 dedicated Pathways to Work advisers are already based in Jobcentres across England, Wales and Scotland. They provide voluntary, one-to-one support to people receiving health-related benefits — many of whom previously had no access to employment help.

Tens of thousands have already taken up the offer, with around 65,000 people expected to benefit this financial year.

Boost to Universal Credit standard allowance

As part of efforts to ease the cost of living, the reforms also include a sustained above-inflation increase to the standard Universal Credit allowance for nearly four million households.

For a single person aged 25 or over, this means an extra £295 this year, rising to around £760 a year by the end of the decade, putting more money in the pockets of people who are working or actively seeking work.

“A system that rewards work”

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”.

Real-life impact: Hayden’s story

Among those already benefiting is Hayden, who suffered severe nerve damage to his legs following an accident. Despite spending hours each morning building up strength just to walk, he had always dreamed of becoming a personal trainer — but could not afford the training.

With help from a Pathways to Work adviser, including funding for equipment and support finding the right course, Hayden began his personal training qualification earlier this month.

Hayden said: “My Pathways to Work adviser saw my potential, not my limitations.

They found me the right course, and made sure I had everything I needed to succeed. I’m now training to become a Personal Trainer – something I never thought possible.

This support has genuinely transformed my future”.

Wider support to get Britain working

The reforms are part of a broader package aimed at tackling long-term sickness and economic inactivity. WorkWell is being rolled out across England to support up to 250,000 people, while Connect to Work will provide personalised help to 300,000 people over the next five years.

With 2.8 million people currently out of work due to long-term sickness, ministers say the changes are central to the government’s Plan for Change to remove barriers to opportunity and grow the workforce.

By reducing the health element for new claimants while expanding employment support, the reforms are expected to save taxpayers £950 million by 2030/31, which the government says will deliver fairness for both working people and taxpayers. Photo by Wikimedia commons.