Numi Kent
The Department for Work and Pensions (DWP) has officially confirmed significant Universal Credit and Personal Independence Payment (PIP) changes following the passage of its welfare reform bill through Parliament on July 1, 2025.
The reforms come with critical amendments and delays, reflecting political compromise after strong opposition from Labour MPs and disability advocates.
MP-Backed Welfare Reform Bill Clears First Stage
Initially, 126 Labour MPs threatened to oppose the proposed bill, which could have blocked its progression. However, only 49 MPs eventually voted against it, allowing the bill to pass its first hurdle.
To ease tensions, the government made key concessions, which are now central to the DWP’s revised implementation strategy.
Key Welfare Reform Concessions by DWP
In response to backlash, the government introduced several changes to the bill to secure support:
| Change | Details |
|---|---|
| PIP Reform Delay | Eligibility changes delayed until November 2026 |
| Income Protection | Real-term income protection for current and severely ill Universal Credit recipients |
| Assessment Review | Full PIP assessment process review led by Disabilities Minister Sir Stephen Timms |
These amendments indicate a shift from the government’s original stance, especially concerning the timing and scope of disability benefits reform.
Updates to Universal Credit – What’s Changing?
While PIP reforms are postponed, Universal Credit changes are still scheduled to begin in April 2026. Here’s what to expect:
- Standard allowance increase for claimants.
- Health element halved for most new claimants with medical conditions.
These changes are designed to simplify welfare support but may reduce support for future claimants with long-term illnesses or disabilities.
Financial Implications for the Government
The delayed reforms create a potential budget issue. Chancellor Rachel Reeves aimed to cut spending through welfare reforms, but revised forecasts now suggest minimal or no savings through 2029–30.
The Resolution Foundation has raised concerns that these delays could undermine the Chancellor’s fiscal goals, especially with inflation and cost-of-living pressures mounting.
Next Steps for the Legislation
The government has pledged to remove controversial PIP reform clauses from the bill before the next reading in the House of Commons.
If passed by both MPs and the House of Lords, the updated bill will officially become law, with most of its effects felt over the next 12 to 24 months.
The Role of Sir Stephen Timms in the PIP Review
A pivotal component of the reform bill is the comprehensive review of the PIP assessment process, spearheaded by Sir Stephen Timms, the Disabilities Minister. The review will:
- Involve disabled individuals in its development.
- Ensure that PIP eligibility rules are fairer and more inclusive.
- Delay any rollout of major changes until the final report is submitted and approved.
This review is a critical safeguard for those concerned about discrimination, poor assessments, and loss of entitlements under the previous model.
The UK Government’s welfare reform journey is far from over. With Universal Credit updates on track and PIP reforms on hold, 2025 and 2026 will be transitional years for benefit recipients.
The government must now balance its fiscal plans, party politics, and public expectations. For claimants, staying informed is key as these changes begin to unfold.
FAQs
What Universal Credit changes are coming in 2026?
The standard allowance will increase, but the health-related element will be reduced by 50% for most new claimants starting April 2026.
Are PIP changes happening soon?
No. PIP eligibility reforms are delayed until at least November 2026, pending the results of a formal assessment review.
Who is leading the PIP review process?
Sir Stephen Timms, Disabilities Minister, is leading the independent review involving people with lived experience of disability.