Universal Credit Act 2025
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).
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.
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).
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%
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.
In this section—
“consumer prices index” means the all items consumer prices index published by the Statistics Board;
a “relevant power” means—
the power in section 9(2) of the Welfare Reform Act 2012, or
the power in section 150(2)(b) of the Social Security Administration Act 1992;
“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;
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.
In this section and sections 3 to 5—
“tax year” means the 12 months beginning with 6 April in any year;
“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).
In the table in regulation 36 of the Universal Credit Regulations 2013 (amounts of elements)—
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
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”.
Schedule 1 makes further amendments to the Universal Credit Regulations 2013 in connection with the amendments made by subsection (1).
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.
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.
In this section—
“the LCWRA element” has the meaning given by regulation 27 of the Universal Credit Regulations 2013;
“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).
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—
the protected LCWRA amount for that tax year, or
any amount of the standard allowance for that tax year.
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—
the sum of those amounts for the previous tax year, by
the relevant CPI percentage for the current tax year.
In this section—
“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);
“the LCWRA element” has the meaning it has in section 3;
“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;
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.
In this section and in section 5—
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);
the “consumer prices index” means the all items consumer prices index published by the Statistics Board.
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.
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—
any amount of an ESA IR disability premium;
the ESA IR support component;
the ESA IR work-related activity component.
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—
any amount of an ESA IR disability premium for that tax year,
the ESA IR support component for that tax year, or
any amount of the ESA IR personal allowance for that tax year.
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—
the sum of those amounts for the previous tax year, by
the relevant CPI percentage for the current tax year.
In this section—
an “amount of the ESA IR personal allowance” means an amount—
that is prescribed under section 4(2)(a) of the Welfare Reform Act 2007 (amount of income-related allowance), and
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;
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;
“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;
“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;
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.
Schedule 2 makes provision for Northern Ireland which corresponds to that made by the previous provisions of this Act.
This Act may be cited as the Universal Credit Act 2025.
Section 2
The Universal Credit Regulations 2013 are amended as follows.
In regulation 2 (interpretation), at the appropriate places insert—; .
In regulation 27 (award to include LCWRA element)—
in paragraph (2), at the end insert by reference to whether the claimant is—;
in paragraph (3), after “activity” insert “or is a severe conditions criteria claimant”;
in paragraph (4)—
the words from “the award” to the end become sub-paragraph (a) of that paragraph, and
at the end of that sub-paragraph insert , and
After regulation 27 insert—
In regulation 38 (introduction: capability for work or work-related activity), after “activity,” insert “or is a severe conditions criteria claimant,”.
After regulation 40 (limited capability for work and work-related activity) insert—
In regulation 41 (when an assessment may be carried out)—
in paragraph (1)—
in sub-paragraph (a), after “activity” insert “or is a severe conditions criteria claimant”;
in the closing words, for “(4)” substitute “(6)”;
in paragraph (2)(b)—
the words from “that a claimant” to the end become paragraph (i) of that sub-paragraph;
at the end of that paragraph insert , or;
in paragraph (2), in the words after sub-paragraph (b), for “no assessment may” substitute “an assessment for the purposes of determining whether a claimant has limited capability for work and work-related activity may not”;
for paragraph (4) substitute—
In regulation 43 (information requirement)—
in paragraph (1), in the opening words, after “activity” insert “or is a severe conditions criteria claimant”;
in paragraph (3), for “, as the case may be, for work and work-related activity” substitute “for work and work-related activity or as not being a severe conditions criteria claimant (as the case may be)”.
In regulation 44 (medical examination)—
in paragraph (1), after “activity” insert “or is a severe conditions criteria claimant”;
in paragraph (2), for “, as the case may be, for work and work-related activity” substitute “for work and work-related activity or as not being a severe conditions criteria claimant (as the case may be)”.
In regulation 23 (introduction), in paragraph (2)(a) for “and” substitute “to”.
Section 6
The Department for Communities in Northern Ireland 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 sub-paragraph (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 relevant tax year. 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). 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% In this paragraph— In this paragraph and paragraphs 3 and 4—
The Universal Credit Regulations (Northern Ireland) 2016 (S.R. (N.I.) 2016 No. 216) are amended as follows. In regulation 2 (interpretation), at the appropriate places insert—; . In regulation 28 (award to include LCWRA element)— After regulation 28 insert— In the table in regulation 38 (amounts of elements)— After regulation 41 (limited capability for work and work-related activity) insert— In regulation 42 (when an assessment may be carried out)— In regulation 44 (information requirement)— In regulation 45 (medical examination)— This paragraph comes into force on 6 April 2026 and has 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 2 of the Welfare Reform (Northern Ireland) Order 2015 (S.I. 2015/2006 (N.I. 1)).
Where it is necessary in order to achieve the result in sub-paragraph (2) for any of the tax years 2026-27 to 2029-30, the Department for Communities in Northern Ireland must exercise the power in Article 14(2) or 17(3) of the Welfare Reform (Northern Ireland) Order 2015 to increase— 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— In this paragraph— In this paragraph and in paragraph 4—
Paragraph 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 Article 14(2) of the Welfare Reform (Northern Ireland) Order 2015 were to the power in section 4(2)(a) of the Welfare Reform Act (Northern Ireland) 2007 (c. 2 (N.I.)). Where it is necessary in order to achieve the result in sub-paragraph (3) for any of the tax years 2026-27 to 2029-30, the Department for Communities in Northern Ireland must exercise the power in section 4(2)(a) or (6)(c) of the Welfare Reform Act (Northern Ireland) 2007 to increase— The result to be achieved for a tax year (“the current tax year”) is that for each combination of amounts referred to in sub-paragraph (2)(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— In this paragraph—