Hundreds of thousands of Universal Credit claimants risk losing more than £2,500 a year if they fail to navigate a significant overhaul of health-related benefits that took effect this week.
The Department for Work and Pensions (DWP) has confirmed that a critical deadline passed on 5 April, marking the start of the “rebalancing” of Universal Credit. Under the new rules, the additional monthly payment for those with a Limited Capability for Work and Work-Related Activity (LCWRA) has been reduced by nearly 50% for new claimants.
While existing claimants already receiving the health element are “protected” and will see their payments remain at the higher rate, those who did not register a health condition or provide a fit note by the deadline now face a lower monthly top-up of £217.26, down from the previous £423.27.
The £2,550 annual shortfall
The figure of £2,550 represents the approximate annual difference between the protected higher-tier health element and the new, lower rate being introduced for most new recipients.
Charities, including the disability group Contact, issued urgent warnings throughout the week leading up to the deadline. They urged individuals to “lodge their claim or report a change” by 5 April to ensure they were categorised under the old, more generous system.
The warning specifically targeted:
- Existing claimants who had not yet declared a health condition.
- New applicants who had not yet submitted their first GP “fit note”.
- Those undergoing “Managed Migration” from older benefits like Employment and Support Allowance (ESA).
New “Severe Conditions” hurdle
For those who missed the 5 April cut-off, the only route to the higher rate of support is through the newly implemented “Severe Conditions Criteria” (SCC).
To qualify for the higher payment under these rules, claimants must provide medical evidence – typically from the NHS – showing that their condition is not only lifelong but also results in a constant and significant lack of function. Early projections suggest only about 8% of claimants with health conditions will meet this stricter threshold.
“If you miss these deadlines, your chances of getting the higher existing rate… will depend on you meeting the severe conditions criteria,” a spokesperson for Contact stated. The DWP has indicated that private medical evidence may be accepted, provided it has been formally integrated into the claimant’s NHS records.
The April rent update requirement
The health-element deadline coincides with a separate administrative task for social housing tenants. Most local authorities and housing associations increased rents by 4.8% on 6 April.
Unlike legacy benefits, Universal Credit does not automatically update for these changes. Claimants must manually confirm their new housing costs through their online journal. Failure to do so before the end of their April assessment period will result in underpayments and potential rent arrears.
How to update the journal
The DWP has issued specific instructions for claimants to follow:
- Sign in to your Universal Credit online account.
- Navigate to the ‘To-Do’ list.
- Select ‘Confirm your housing costs’ (specifically avoiding the general ‘Report a change of circumstances’ link).
- Enter the exact figures from the rent increase letter provided by the landlord.
Rationale for the “Rebalancing”
The government maintains that the reforms are necessary to “remove the incentive for people to declare themselves unable to work.” By reducing the health top-up and simultaneously increasing the “Standard Allowance” (the basic element of Universal Credit) by more than inflation, the DWP aims to encourage more people back into employment.
A DWP spokesperson said: “These reforms put more money in the pockets of all claimants through the standard allowance, while ensuring that the most intensive support is targeted at those with the most severe, lifelong conditions.”
However, advocates for the disabled have criticised the move, noting that 92% of new health-related claimants could be left significantly worse off during a persistent cost-of-living crisis.
Next steps for claimants
Individuals who missed the 5 April deadline but have a health condition should still declare it in their journal immediately.
While the “legacy” higher rate is no longer guaranteed, a Work Capability Assessment remains the essential path to any health-related top-up. Claimants will need a valid fit note and should ensure their journal entries clearly describe how their condition limits their functional capacity in daily life.
