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Universal Credit Act 2025

Type Public General Act

Publication 2025-09-03

State In force

Department Statute Law Database

Source legislation.gov.uk

Reform history JSON API

Universal credit

Standard allowance for tax years 2026-27 to 2029-30

1

(1) The Secretary of State must exercise a relevant power in order to secure that the amounts of the standard allowance for tax years 2026-27 to 2029-30 are at least the amounts calculated for each tax year in accordance with subsection (2).

(2) The minimum amounts of the standard allowance for a tax year are calculated as follows—

Step 1 Where the tax year is 2026-27, take the amounts of the standard allowance for tax year 2025-26. Where the tax year is 2027-28, 2028-29 or 2029-30, take the amounts resulting from Step 2 for the previous tax year.

Step 2 Increase the amounts identified in Step 1 by the relevant CPI percentage for the tax year.

Step 3 Increase the amounts resulting from Step 2 by the relevant uplift percentage for the tax year.

(3) The “relevant CPI percentage” for a tax year is the percentage by which the consumer prices index for the September before the start of the tax year is higher than it was for the September before that (or 0% if it is not higher).

(4) The table below sets out the relevant uplift percentage for tax years 2026-27 to 2029-30—

Tax year	Relevant uplift percentage
2026-27	2.3%
2027-28	3.1%
2028-29	4.0%
2029-30	4.8%

(5) Subsections (1) and (2)(c) of section 150 of the Social Security Administration Act 1992 (annual up-rating of benefits) do not apply, in the tax years ending with 5 April 2026, 5 April 2027, 5 April 2028 and 5 April 2029, to any amount of the standard allowance.

(6) In this section—

(a) “consumer prices index” means the all items consumer prices index published by the Statistics Board;

(b) a “relevant power” means—

(i) the power in section 9(2) of the Welfare Reform Act 2012, or

(ii) the power in section 150(2)(b) of the Social Security Administration Act 1992;

(c) “the standard allowance” means the allowance to be included in an award of universal credit under section 9(1) of the Welfare Reform Act 2012;

(d) the standard allowance “for” a tax year means the standard allowance applicable for any assessment period commencing on or after the first Monday of that tax year and before the first Monday of the following tax year, and for this purpose “assessment period” has the same meaning as in Part 1 of that Act.

(7) In this section and sections 3 to 5—

(a) “tax year” means the 12 months beginning with 6 April in any year;

(b) “tax year 2025-26” means the tax year beginning on 6 April 2025 (and any corresponding expression in which two years are similarly mentioned is to be read in the same way).

LCWRA element for tax year 2026-27

2

(1) In the table in regulation 36 of the Universal Credit Regulations 2013 (amounts of elements)—

(a) before the row showing the amount for limited capability for work and work-related activity (“the existing row”) insert—

claimant with limited capability for work and work-related activity, other than a pre-2026 claimant, a severe conditions criteria claimant or a claimant who is terminally ill	£217.26

;

(b) in the existing row, for “limited capability for work and work-related activity” substitute “pre-2026 claimant, severe conditions criteria claimant or claimant who is terminally ill”.

(2) Schedule 1 makes further amendments to the Universal Credit Regulations 2013 in connection with the amendments made by subsection (1).

(3) This section and Schedule 1 come into force on 6 April 2026 and have effect in relation to assessment periods commencing on or after that date, and for this purpose “assessment period” has the same meaning as in Part 1 of the Welfare Reform Act 2012.

Freeze of LCWRA and LCW elements for tax years 2026-27 to 2029-30

3

(1) Subsections (1) and (2) of section 150 of the Social Security Administration Act 1992 (annual up-rating of benefits) do not apply, in the tax years ending with 5 April 2026, 5 April 2027, 5 April 2028 and 5 April 2029, to the LCWRA element or the LCW element.

(2) In this section—

(a) “the LCWRA element” has the meaning given by regulation 27 of the Universal Credit Regulations 2013;

(b) “the LCW element” has the meaning given by regulation 27 of the Universal Credit Regulations 2013 (so far as saved by paragraph 8 of Schedule 2 to the Employment and Support Allowance and Universal Credit (Miscellaneous Amendments and Transitional and Savings Provisions) Regulations 2017).

Protected LCWRA amount for tax years 2026-27 to 2029-30

4

(1) Where it is necessary in order to achieve the result in subsection (2) for any of the tax years 2026-27 to 2029-30, the Secretary of State must exercise the power in section 9(2) or 12(3) of the Welfare Reform Act 2012 to increase—

(a) the protected LCWRA amount for that tax year, or

(b) any amount of the standard allowance for that tax year.

(2) The result to be achieved for a tax year (“the current tax year”) is that for each combination of the protected LCWRA amount and an amount of the standard allowance, the sum of those amounts for the current tax year is at least (in each case) the amount given by increasing—

(a) the sum of those amounts for the previous tax year, by

(b) the relevant CPI percentage for the current tax year.

(3) In this section—

(a) “the protected LCWRA amount” means the amount of the LCWRA element that applies to a pre-2026 claimant, a severe conditions criteria claimant or a claimant who is terminally ill (within the meanings of the Universal Credit Regulations 2013);

(b) “the LCWRA element” has the meaning it has in section 3;

(c) “the standard allowance” means the allowance to be included in an award of universal credit under section 9(1) of the Welfare Reform Act 2012;

(d) reference to an amount or allowance “for” a tax year means the amount or allowance applicable for any assessment period commencing on or after the first Monday of that tax year and before the first Monday of the following tax year, and for this purpose “assessment period” has the same meaning as in Part 1 of that Act.

(4) In this section and in section 5—

(a) the “relevant CPI percentage” for a tax year is the percentage by which the consumer prices index for the September before the start of the tax year is higher than it was for the September before that (or 0% if it is not higher);

(b) the “consumer prices index” means the all items consumer prices index published by the Statistics Board.

Legacy employment and support allowance payments

5

(1) Section 1 applies in relation to the amounts of the ESA IR personal allowance for tax years 2026-27 to 2029-30 as it applies in relation to the amounts of the standard allowance for those tax years, but as if the reference to the power in section 9(2) of the Welfare Reform Act 2012 were to the power in section 4(2)(a) of the Welfare Reform Act 2007.

(2) Subsections (1) and (2) of section 150 of the Social Security Administration Act 1992 (annual up-rating of benefits) do not apply, in the tax years ending with 5 April 2026, 5 April 2027, 5 April 2028 and 5 April 2029, to the following sums—

(a) any amount of an ESA IR disability premium;

(b) the ESA IR support component;

(3) Where it is necessary in order to achieve the result in subsection (4) for any of the tax years 2026-27 to 2029-30, the Secretary of State must exercise the power in section 4(2)(a) or (6)(c) of the Welfare Reform Act 2007 to increase—

(a) any amount of an ESA IR disability premium for that tax year,

(b) the ESA IR support component for that tax year, or

(4) The result to be achieved for a tax year (“the current tax year”) is that for each combination of amounts referred to in subsection (3)(a) to (c) to which a person could be entitled, the sum of those amounts for the current tax year is at least (in each case) the amount given by increasing—

(a) the sum of those amounts for the previous tax year, by

(b) the relevant CPI percentage for the current tax year.

(5) In this section—

(a) an “amount of the ESA IR personal allowance” means an amount—

(i) that is prescribed under section 4(2)(a) of the Welfare Reform Act 2007 (amount of income-related allowance), and

(ii) that is not an amount of a premium specified in Part 3 of Schedule 4 to the Employment and Support Allowance Regulations 2008 or an amount in respect of housing costs;

(b) an “amount of an ESA IR disability premium” means an amount of the severe disability premium or enhanced disability premium specified in Part 3 of Schedule 4 to the Employment and Support Allowance Regulations 2008, so far as prescribed under section 4(2)(a) of the Welfare Reform Act 2007;

(c) “the ESA IR support component” means the amount specified in paragraph 13 of Part 4 of Schedule 4 to the Employment and Support Allowance Regulations 2008, so far as specified under section 4(6)(c) of the Welfare Reform Act 2007;

(d) “the ESA IR work-related activity component” means the amount specified in paragraph 12 of Part 4 of Schedule 4 to the Employment and Support Allowance Regulations 2008, so far as specified under section 4(6)(c) of the Welfare Reform Act 2007 for the purposes of cases falling within paragraphs 2 to 7 of Schedule 2 to the Employment and Support Allowance and Universal Credit (Miscellaneous Amendments and Transitional and Savings Provisions) Regulations 2017;

(e) a reference to an amount or component “for” a tax year means the amount applicable for any benefit week commencing on or after the first Monday of that tax year and before the first Monday of the following tax year, and for this purpose “benefit week” has the same meaning as in the Employment and Support Allowance Regulations 2008.

Corresponding provision for Northern Ireland

6

Schedule 2 makes provision for Northern Ireland which corresponds to that made by the previous provisions of this Act.

Short title

7

This Act may be cited as the Universal Credit Act 2025.

Schedule 1

1

The Universal Credit Regulations 2013 are amended as follows.

2

In regulation 2 (interpretation), at the appropriate places insert—

“pre-2026 claimant” has the meaning in regulation 27A(1);

;

“severe conditions criteria claimant” has the meaning in regulation 40A(2);

3

In regulation 27 (award to include LCWRA element)—

(a) in paragraph (2), at the end insert

by reference to whether the claimant is— (a) a pre-2026 claimant, (b) a severe conditions criteria claimant, (c) terminally ill, or (d) any other claimant.

;

(b) in paragraph (3), after “activity” insert “or is a severe conditions criteria claimant”;

(i) the words from “the award” to the end become sub-paragraph (a) of that paragraph, and

(ii) at the end of that sub-paragraph insert

, and (b) where the LCWRA element for each of them is a different amount, the LCWRA element to be included is the higher amount.

4

After regulation 27 insert—

(27A) (1) For the purposes of regulation 27, a claimant with limited capability for work and work-related activity is a “pre-2026 claimant” if the claimant— (a) was entitled at any time before 6 April 2026 to an award of universal credit that included the LCWRA element, and (b) has been entitled to an award of universal credit that included the LCWRA element continuously from that time. (2) For the purpose of determining whether the claimant has been continuously entitled to an award of universal credit, no account is to be taken of any period of non-entitlement— (a) that begins because the financial condition in section 5(1)(b) or (2)(b) of the Act ceases to be met, and (b) that ends within the period of six months beginning with the day on which that condition ceased to be met.

5

In regulation 38 (introduction: capability for work or work-related activity), after “activity,” insert “or is a severe conditions criteria claimant,”.

6

After regulation 40 (limited capability for work and work-related activity) insert—

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