LCWRA changes are part of wider welfare reforms outlined in the Government’s Pathways to Work Green Paper, targeting what ministers call “perverse incentives” in the benefits system that may deter people from seeking employment. While current recipients remain unaffected, new claimants after the cut-off date will receive significantly less financial support.
Fixed-Rate Health Element Will Replace Rising LCWRA Top-up
The LCWRA component, which offers extra financial support to individuals unable to work due to illness or disability, currently increases each year in line with inflation. As of April 2025, this will rise to £439.35 per month, according to the Department for Work and Pensions (DWP). However, under new legislation that received Royal Assent on 3 September 2025, this annual uplift will no longer apply to new claimants from April 2026.
The DWP has clarified that those already receiving LCWRA payments before April 2026 will not be affected, provided they remain in the same category after reassessment. In a statement issued in response to the Work and Pensions Committee, the department said the change was intended to align the system more closely with a “pro-work” social security model.
According to the DWP, the disparity between the LCWRA element and the standard Universal Credit allowance, which for a single person aged 25 or over currently stands at £368.74 per month, has grown over time. This widening gap, it argues, risks encouraging claimants to seek incapacity status rather than pursue employment. The four-year benefit freeze from 2015 to 2019 contributed to this divergence, as it applied to the standard allowance but not to the LCWRA element.
Reform Seeks to Shift Focus from Long-Term Inactivity to Employment
The Government says the new approach is part of a broader strategy to tackle long-term economic inactivity and better support those with the potential to return to work. According to the DWP’s Green Paper, the current system reinforces “stark distinctions” between benefit rates, potentially trapping individuals in categories with poor employment outcomes.
“The objective of these changes is to reduce perverse incentives, promote labour market engagement over inactivity, and improve the adequacy of the standard allowance whilst supporting those with most severe needs,” the department stated. Ministers maintain that those with life-long or severe disabilities who are placed in the LCWRA group after April 2026 will continue to receive the higher payment.
Importantly, the policy includes safeguards allowing individuals who attempt to return to work to retain access to their previous benefit rate if the job does not work out. They will be able to revert to their original entitlement without a new assessment, provided they return to claiming within six months.
The updated Impact Assessment for the legislation was published in July 2025, outlining the fiscal and social rationale behind the shift. While the move has faced criticism from campaigners warning of reduced support for vulnerable groups, the Government insists that the reformed model will provide more balanced and sustainable support.
