The Department for Work and Pensions (DWP) has set out a significant timeline for sweeping changes to the welfare system, which will see nearly four million households receive a substantial financial uplift. Sir Stephen Timms, the minister responsible, has provided crucial details on the transition from legacy benefits and upcoming adjustments to Personal Independence Payment (PIP).
ESA Migration and the Health Element Overhaul
The DWP plans to complete the migration of all claimants from income-related Employment and Support Allowance (ESA) to Universal Credit by March 2026. In a written parliamentary reply to Labour MP Amanda Martin last year, Sir Stephen Timms confirmed that these individuals will move onto the Universal Credit Health Element as part of this process.
He addressed concerns about potential income loss, stating: "To protect any claimants who have not migrated by April 2026 we intend to mirror as closely as possible the changes made in Universal Credit in the ESA rates." This means changes to the support component and disability premia will reflect the new Limited Capability for Work and Work-Related Activity (LCWRA) rates within Universal Credit.
The £725 Annual Income Boost and Universal Credit Act
Central to the reforms is the Universal Credit Act, which has now received Royal Assent. This legislation will permanently increase the Universal Credit standard allowance above inflation. By the 2029/30 financial year, this is projected to be worth an additional £725 in cash terms for a single person aged 25 or over.
The Institute for Fiscal Studies notes this marks the largest permanent real-terms increase in main out-of-work support since 1980. The DWP states the reform tackles a "fundamental imbalance" that created "perverse incentives" within the old system.
From April 2026, the health top-up for new claims will be reduced to £50 per week. However, all existing recipients of the health element, plus new claimants who meet Severe Conditions Criteria or the Special Rules for End of Life (SREL), will continue to receive the higher payment. Those with the most severe, lifelong conditions will also be exempt from reassessment.
New Protections and the PIP Assessment Review
Alongside the financial changes, the DWP is introducing a 'Right to Try Guarantee'. This allows people on health and disability benefits to attempt work without the immediate fear of a reassessment, supporting those recovering from illness or managing conditions.
Furthermore, a major ministerial examination of the PIP assessment process is being launched, co-created with disabled people and their representative organisations. Headed by Disability Minister Sir Stephen Timms, the review will involve MPs, specialists, and stakeholders to ensure the system remains fair and fit for the future.
These reforms are backed by a £3.8 billion investment in employment support for sick and disabled people over the Parliament. The funding will accelerate programmes like Connect to Work, offering tailored, one-to-one support to help individuals move into employment when they are ready.
The DWP emphasised that the combined changes mean recipients "can live with dignity and security, knowing the reforms to the welfare system mean it will always be there to support them."
