New Universal Credit and Personal Independence Payment Bill introduced in Parliament

4 mins read

Thursday 19 June 2025

The government has introduced the new Universal Credit and Personal Independence Payment Bill yesterday in Parliament.

The Bill sets out in more detail its plans for introducing an additional four point test for Personal Independence Payment (PIP) and for cutting Universal Credit health payments for new claimants with a limited capability for work and work-related activity (LCWRA).  

The new Bill does not cover proposals to scrap Universal Credit health payments for under 22s. Nor does it include changes to the age at which young people can claim PIP. Both of these are instead part of a separate consultation due to end on 30 June.

The second reading of the Bill will be on Tuesday 1 July. This will be the first time MPs can debate and vote on the Bill.

Tightening PIP daily living component rules

The Bill expands on proposals first outlined in the Pathways to Work Green Paper. It confirms that there will be an additional test for getting the PIP daily living component. The test requires a disabled person (unless terminally ill) to score a minimum of four points in at least one PIP daily living activity.

The Bill makes clear that existing PIP claimants who lose their entitlement to PIP daily living component because of the four point rule will have a temporary 13-weeks run-on in their PIP. This run-on will also apply to any “passported benefits”, such as any Carer’s Allowance or Universal Credit carer’s element payments.

Cuts in Universal Credit health payments for new claims

The Bill also confirms a large cut in the amount of LCWRA element for new claims from April 2026. While existing claimants will continue to receive £423.27 per month, claimants who first establish LCWRA from April 2026 will receive £217.26 per month.

Some new claimants will be protected from this cut. They will instead receive a higher rate of LCWRA element, meaning they will receive the same amount as existing claimants. This will apply to those who are terminally ill and to disabled people who meet “severe conditions criteria”. Those who meet these severe conditions criteria will also be exempt from routine Universal Credit health reassessments.

To be protected under this severe conditions criteria, a disabled person must meet all of the following tests:

  • They must have a condition that an appropriately-qualified healthcare professional has diagnosed in the course of receiving NHS services.
  • Their condition will last for the rest of their life.
  • There is no realistic prospect of recovery of function.
  • The individual’s level of function must mean they would “constantly” meet the tests to be treated as having LCWRA “on all occasions on which the claimant undertakes or attempts to undertake an activity”.

Other benefits changes included the Bill

The Bill also includes the freezing of the LCWRA element between tax years 2026/2027 to 2029/2030. This will impact all Universal Credit claimants who qualify for the LCWRA element – both existing and new claimants.

Alongside this, the Bill makes provision for a small increase in the amount of the Universal Credit standard allowance.

The Bill makes clear that there will be changes to legacy Employment and Support Allowance (ESA) payments to mirror changes to Universal Credit. This is because some disabled adults have not yet migrated from income-related ESA to Universal Credit.

Explanatory notes published alongside the Bill confirm that the government expects that:

  • By 2028/29, 800,000 disabled people will be on the new reduced rate payment of the LCWRA element.
  • As a result of the new four point rule, 370,000 existing PIP claimants will lose their daily living component by 2029/30. A further 430,000 claimants will not get the PIP they would otherwise have been entitled to.
  • As a result of this change to PIP rules, 150,000 full time carers will lose or not qualify for Carer’s Allowance/the carer element of Universal Credit.

Which parts of the UK does the Bill affect

The changes relating to Universal Credit and income-related ESA will apply to England, Wales, Northern Ireland and Scotland.

Changes to PIP will apply to England, Wales and Northern Ireland. Changes to PIP rules won’t impact Scotland which has its own Adult Disability Payment.