THOUSANDS of terminally ill individuals could lose £2,000 per year if the government proceeds with its plans to cut incapacity benefits.
The end-of-life charity Marie Curie has warned that 25,000 Universal Credit recipients face significant financial strain as the health-related component of the benefit is set to be slashed.
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Under reforms outlined in a recent Green Paper, incapacity payments for new claims will be halved from April 2026, dropping from £423.27 to £208.10 per month for individuals with limited capability for work and work-related activity.
The cuts, first announced in March, were presented as a measure to curb Britain’s ballooning welfare budget and bring greater control to the nation’s finances.
Marie Curie has criticised the proposals for failing to include specific protections for terminally ill individuals, including those eligible under the Special Rules for Terminal Illness.
These rules currently allow those with a life expectancy of less than 12 months to access benefits more quickly and receive higher payments without undergoing lengthy medical assessments.
This potential £2,000 annual loss would add to the existing financial hardships faced by terminally ill individuals.
According to a recent report by the charity, over 300 people die in poverty every day in the UK.
Jamie Thunder, senior policy manager at Marie Curie, said: “The last thing people facing a terminal condition need is even more worry about whether they can make ends meet.
“Government protections in place are already woefully insufficient.
“Rather than putting even more pressure on people already facing hardship, more needs to be done to ensure those dealing with terminal conditions can die with dignity, and spend their remaining days with their loved ones, rather than scrambling to keep the heating on.
“Ministers must urgently set out how terminally ill people will be protected, including dying people with longer prognoses or with rare conditions that are hard to predict.”
WELFARE SHAKE-UP
Last month, Chancellor Rachel Reeves announced major welfare cuts to balance the nation’s finances and boost employment.
Key welfare changes include:
- Raising the eligibility threshold for PIP, achieving £3.4billion in annual savings.
- Temporarily introducing an above-inflation rise to Universal Credit’s standard allowance (until 2029), while reducing the highest incapacity payment.
- Banning under-22s from claiming incapacity benefits under Universal Credit entirely.
- Slashing Universal Credit incapacity benefits for new claimants
- Abolishing the Work Capability Assessment (WCA) by 2028, with all health-related payments to be transitioned to PIP in the future.
- Launching a “Right to Work Guarantee”, allowing unemployed individuals to attempt returning to work without losing benefits if they find it unsustainable.
- Merging jobseeker’s allowance and employment support allowance, with a system that awards higher payments to those who have a work history compared to those who have not.
What’s happening to Universal Credit payments?
Under the reforms announced by the government last month, the standard Universal Credit allowance will rise, while the health-related component will be reduced for new claimants.
The government has confirmed that the standard allowance for Universal Credit will receive a temporary increase exceeding the rate of inflation.
This uplift will be calculated based on the Consumer Price Index (CPI) inflation rate, with an additional five percentage points applied.
For a single person aged 25 and over, this will result in a £7 weekly rise from April 2026 – an increase from the current £92 per week to £106 per week by 2029.
The DWP previously estimated that above-inflation increases will boost the average claimant’s standard allowance by £775 in cash terms compared to inflation-only rises by 2029.
However, those receiving incapacity benefits are set to face a significant cut under the new terms.
For existing claimants, the current incapacity payment of £423.27 per month for individuals with limited capability for work and work-related activity will remain frozen at this level until 2030.
For new claims from April 2026, however, this payment will be halved to £208.10 per month, or £50 per week, and will also remain frozen at this reduced rate until 2030.
The DWP has stated that a new premium will be introduced for those with the most severe, lifelong conditions who are unable to work, though the specifics of this proposal have yet to be disclosed.
What is the Universal Credit standard allowance?
UNIVERSAL Credit is a welfare scheme which was designed to combine several of the old “legacy benefits
The standard allowance is the basic monthly payment provided to individuals or families who qualify.
The amount you receive depends on your age and whether you’re single or in a couple:
- Single, under 25: £316.98
- Single, 25 or over: £400.14
- Couple, both under 25: £497.55
- Couple, one or both 25 or over: £628.10
You may also be eligible for additional amounts if you have children, have a disability or health condition, or need help with housing costs.
What else is changing?
The Work Capability Assessment, which determines whether someone is deemed fit for work or has limited capability for work (LCW) or limited capability for work-related activity (LCWRA), will be scrapped by 2028.
Instead the DWP will use the PIP assessment to assess entitlement for any Universal Credit health supplements.
Claimants under the age of 22 will no longer be eligible for the health element of Universal Credit.
The government is also introducing legislation to remove barriers to employment for benefit claimants by ensuring that attempting work will no longer automatically trigger a reassessment or review of their award.
The intention is to give people the confidence to try work without fear of immediately losing their benefits if it doesn’t work out.
What are Work Capability Assessments?
The DWP uses the Work Capability Assessment (WCA) to evaluate a claimant’s ability to work when applying for Universal Credit due to a health condition or disability.
The WCA focuses on assessing functional limitations rather than specific medical diagnoses.
It considers both physical and mental health, awarding points based on how an individual’s condition impacts their ability to carry out daily activities.
After the assessment, claimants may be placed into one of two groups – Limited Capability for Work (LCW) or Limited Capability for Work and Work-Related Activity (LCWRA).
Claimants assigned to the LCW group are recognised as currently unfit for work but may be capable of returning to employment in the future with the right support and assistance.
Those in this group are required to engage in work-related activities, such as attending Jobcentre appointments or training courses.
Failure to comply with these requirements may result in sanctions, including a reduction or suspension of benefits.
Claimants are placed in the LCWRA group if their health condition or disability is considered so severe that they are not expected to be able to work or participate in any work-related activities in the foreseeable future.
Those in the LCWRA group receive an additional amount on top of their standard Universal Credit allowance currently worth £423.27 a month.