By David Bentley

Copyright birminghammail

Thousands of people who receive additional Universal Credit for disabilities and health conditions – and are also allowed to keep more of their wages if they are still able to work – will lose all this support under Government plans, a new report has warned. For those found to have ‘limited capability for work and work-related activity’ (LCWRA), a cash top-up can be added to their Universal Credit claim. This LCWRA payment is currently worth an extra £423 a month or just over £5,000 a year. Those on LCWRA who are able to do some form of work are also allowed to keep a certain amount of their benefit before any deductions are applied. This is called the work allowance. For those whose UC claim includes money towards housing costs, they can earn £411 a month before their benefits start being cut by 55p for every £1 earned, and for those who get nothing towards housing costs, the allowance is £684 a month. READ MORE: LCWRA is awarded after a work capability assessment finds that someone has no requirements to work or look for a job, though people can still work if their health allows it. The assessment is to be abolished in 2028/2029, with a PIP daily living award becoming the gateway to qualifying for UC health support instead. In a new report, Citizens Advice warns that this will mean a large number of people who don’t get a PIP daily living payment will lose not just their LCWRA top-up but also their work allowance. It is asking the DWP to find a way to keep the work allowance in place for those who no longer qualify for the LCWRA element, to extend it so more disabled people qualify and are encouraged to work, and to consider increasing the threshold. The report says: “R ather than further restricting access to the work allowance, the DWP should be looking to expand disabled people’s access to it. Especially given how many disabled people are already struggling to access it. Expanding access to the work allowance could therefore serve as an effective policy tool as part of the government’s broader efforts to support more disabled people into employment.” It says having the LCWRA payment and work allowance can often make a huge difference in someone deciding whether it is worth going to work. The report concludes: ” The elements of our social security system designed to increase the financial benefits of work for disabled people are not achieving their full potential. For many, the modest financial gain from employment doesn’t outweigh the potential impact on their health or the risk of losing other essential support. While financial barriers are rarely the only obstacles disabled people face, they often contribute to and exacerbate other challenges. “Financial barriers are also among the issues the government is best placed to address. By improving the financial returns from work, the government could create a stronger foundation for disabled people to engage in employment. “This could include widening access to the work allowance and increasing its value, ensuring benefits income is better protected. In addition, the upcoming ‘right to try’ legislation could be expanded so that engaging with work safeguards health and disability benefits not only at reassessments, but also at routine and future assessments.” The DWP previously revealed that 319,000 people receiving the Universal Credit LCWRA payment have had their claims rejected for the PIP daily living element. This includes just under 50,000 people who receive some PIP in the form of the mobility component but not the daily living part. Under the DWP plans, all these people would lose their LCWRA payment and work allowance. It’s believed that another 500,000 people on the same UC support have never applied for PIP and would, therefore, also be stripped of their LCWRA top-up and work allowance. A DWP spokesperson said: “We’re committed to abolishing the work capability assessment and reforming the system that tells people they either can or can’t work. “We’re also fixing the broken welfare system so it genuinely supports those who can work into employment, backed by £3.8 billion investment in employment support over this parliament, while ensuring there is always a safety net for the most vulnerable. “We have also announced a ministerial review of the PIP assessment process – which puts disabled people at its heart – to make sure it is fit and fair for the future, and will work with disabled people and key organisations representing them to consider how best to do this.” Get breaking news on BirminghamLive WhatsApp . Join our dedicated community for the latest updates sent straight to your phone as they happen. You can find out more about cost-of-living issues in our Money Saving Newsletter, which is sent out daily via email with all the updates you need to know on pensions , PIP , Universal Credit , benefits, finances, bills, and shopping discounts. Get the top stories in your inbox to browse through at a time that suits you.