DWP confirms households on one benefit losing £2,580 | Personal Finance | Finance

A significant change to benefits rules which was introduced in April will see people on one specific type of DWP payment lose up to £2,580 a year.

Although Labour’s planned welfare reforms have been watered down since their first announcement, one policy which has been kept in place is a cut to Universal Credit.

From April, the DWP has confirmed that new claimants of Universal Credit’s Limited Capacity for Work and Work Related Activity (LCWRA) benefit can no longer claim £432.27 per week.

Instead, new claimants making a claim after April 6 are now only able to get a reduced £217.26 per month, which over the course of a year results in £2,580 less in DWP payments.

But existing LCWRA claimants are protected and continue receiving the higher amount. Certain groups of new claimants may still qualify for the higher rate depending on their circumstances, including people with the most severe or lifelong health conditions and those with terminal diagnoses.

A spokesperson for insurance experts Life Pro said: “Most people assume government support stays relatively stable, but changes like this show how quickly household finances can shift. A reduction of more than £2,580 a year could have a noticeable impact on budgeting, particularly for those already facing extra costs linked to a health condition.

“This is where financial planning matters. Even small changes in income can affect long-term stability, so it’s important people understand what they may be entitled to and think ahead where possible.

“With the new rules already in effect, the most important step for anyone affected by a health condition or disability is to understand how the changes apply to them and ensure they are receiving any support they may be entitled to.”

The DWP confirmed the change to payments via gov.uk. It said: “You may get more money on top of your standard allowance if you cannot work because of a health condition or disability.

“This extra amount of money is for people who have limited capability for work and work-related activity (LCWRA). Some people call this the ‘health element’ or the ‘LCWRA element’.

“The Universal Credit Act 2025 changed how this extra amount works from 6 April 2026. These changes do not affect you if you are currently getting LCWRA and have been since before 6 April 2026.”

Citizens Advice explains how you could qualify for the payments.

It says: “The DWP will assess how difficult you find certain everyday activities to decide if you have LCW or LCWRA. They’ll use statements called ‘descriptors’ to describe how difficult you find certain tasks.

“Some descriptors automatically mean you have LCWRA – for example, if you can’t walk more than 50 metres without help, or do a simple task like setting an alarm clock.

“If you report your health condition or disability on or after 6 April 2026, the DWP will also use these descriptors to decide if you meet their ‘severe conditions’ criteria.

“For you to meet the ‘severe conditions’ criteria, at least one of the automatic LCWRA descriptors must apply to you in all these ways: