Exploring the Impacts of the New Universal Credit and Personal Independence Payment Bill

In between the terrible news that the world is seemingly in a self-destruct mode and so many more innocent people will have lost their lives today – Liz Kendall, Work and Pensions Secretary introduced her new ‘Universal Credit and Personal Independence Payment Bill’ in the Commons.

These highlighted some of the proposals in the frankly terrifying ‘Pathways to Work’ Green Paper that she spoke about in March 2025 to the dismay of people with long term health conditions and disabilities. Or for everyone else, the fact that the Government has decided that the need to focus personal independence payment on those of higher needs and benefits cuts for those with health conditions that impact on their capability for work.

She said ‘ 'Our social security system is at a crossroads. Unless we reform it, more people will be denied opportunities, and it may not be there for those who need it. This legislation represents a new social contract and marks the moment we take the road of compassion, opportunity and dignity. This will give people peace of mind, while also fixing our broken social security system so it supports those who can work to do so while protecting those who cannot - putting welfare spending on a more sustainable path to unlock growth as part of our Plan for Change.'

I read the bill and have looked at the impact this is going to have on 800,000 PIP claimants, 150,000 carers and almost 3 million people claiming universal credit.

There is some good news for people claiming Universal Credit – there will be above-inflation increases in the standard allowance that everyone gets, and this may mitigate some of the losses.

They are going to reduce the rates of Limited Capability for Work and work-related activity (LCWRA) for new claims in tax years 2026/2027.

If you need to make a claim under the special rules from 2026/2027 - you will be paid at the same rate of LCWRA as people claiming the element before (not the reduced rate) and there is going to be a new severe conditions criteria who will also be paid at the older more generous rate.

The LCWRA and the LCW elements (which you may be paid if you have been on LCW for a long time) are going to be frozen until 2030.

People who mee the new severe condition criteria will not be reassessed routinely and will have ongoing awards.

There will be provisions for legacy ESA payments so they mirror the changes made for universal credit.

Any individual (unless they are claiming under special rules) must score a minimum of 4 in at least one daily living activity to remain eligible for PIP (this will affect thousands of people).

There will be a run on of 13 weeks payment where claimants lose their PIP following a review and a run on to the passporting benefits such as carers allowance and universal credit carers element.

It was explained that for a claimant to meet the severe conditions criteria they would need to have a condition that is going to last the rest of their life, no realistic prospect of any recovery and the condition needs to be diagnosed by a health care professional in the NHS.

I looked at the explanatory notes as well to discover that they believe of the existing 2.7 million people claiming LCWRA today – they expect only 2.1 million will still be claiming in 2029/2030.

From October 2026 with the introduction of the new 4 point rule – 370,000 people will lose their PIP and a further 430,000 claimants will not get PIP that would be entitled if they claimed today.

150,000 people will also lose either carers allowance or the carers element because of these changes.