By Richard Guttridge
Copyright birminghammail
Nearly four million households are in line for a £725 boost as part of changes to Universal Credit . The Universal Credit Act 2025 is now officially an Act of Parliament. The shake-up of the benefit will recalibrate the core payment and health top-up within Universal Credit. READ MORE: HMRC to deduct £300 directly from bank accounts of state pensioners Get our best money saving tips and hacks by signing up to our newsletter As a result, the standard allowance will permanently rise above inflation, equating to £725 by 2029/30 in cash terms for a single person aged 25 or over. The Institute for Fiscal Studies (IFS) says this will be the most significant permanent real-terms increase to the main rate of out-of-work support since 1980, reports the Daily Record . However, the health element will be cut for new claimants from next April. Changes will include: The DWP is also granting people receiving health and disability benefits the right to attempt work without fear of reassessment and ultimately losing benefits. The aim is to encourage more people back into work. The Bill also outlines measures to safeguard the most vulnerable and severely disabled, those with the most serious, lifelong conditions who are unlikely to recover, so they will not be required to attend a Universal Credit reassessment. Everyone who currently receives the Universal Credit health element and new claimants with 12 months or less to live or who satisfy the Severe Conditions Criteria will also see their standard allowance combined with their health element increase at least in line with inflation annually from 2026/27 to 2029/30. The DWP said: “This means they can live with dignity and security, knowing the reforms to the welfare system mean it will always be there to support them.” They added: “This investment will accelerate the pace of new investments in employment support programmes, building on and learning from successes such as the Connect to Work programme, which are already rolling out to provide disabled people and people with health conditions with one-to-one support at the point when they feel ready to work.” Thomas Lawson, CEO of Turn2us, said: “Halving the health element of Universal Credit for anyone who becomes sick from April 2026 will increase hardship and mean even more people are going without essentials.”
