DWP responds to Universal Credit shake-up fears that claimants will lose £390 | Personal Finance | Finance newsbhunt

Around 520,000 Britons could see their limited capability for work and work-related activity (LCWRA) payments stopped if the Government’s new Universal Credit reforms come into place, the Institute for Fiscal Studies (IFS) found.

The rule change could see claimants lose out on the extra £390 a month payment if they are not able to claim PIP.

The IFS says scrapping the work capability assessment (WCA) would strengthen the financial incentive to work for 1.8million people, however, it would weaken it for around 440,000.

Under current rules, Universal Credit claimants receive a top-up payment of up to £390.06 each month if they are placed in the Limited Capability for Work and Work-Related Activity (LCWRA) group.

Sam Ray-Chaudhuri, a research economist at the IFS and an author of the report, said: “The Government proposes moving to a system where being unable to work will no longer directly confer any additional financial support from the benefits system.

“On the whole, this strengthens financial incentives to work, but getting the reform right will rely on work coaches’ ability to set personalised work requirements that take into account what recipients can reasonably be expected to do – despite there being no formal test of capacity to work and work coaches typically having no medical training.”

Earlier this year the Government announced its “Back to Work” benefit plan and that they were going to scrap the work capability assessment and replace it with a new Universal Credit “Health Element”.

To qualify under the proposed new “Health Element” individuals would need to meet the eligibility criteria for Personal Independent Payments (PIP) as well as Universal Credit. This means claimants will have to undergo a PIP assessment.

PIP can provide Britons a welcome boost of up to £748 a month depending on how their condition affects their daily life and ability to do everyday tasks.

Before accounting for any changes in behaviour, the IFS says 520,000 people who have a health condition that is deemed to limit their ability to work would fail the PIP assessment. Meaning they would not be able to claim the extra support under the new system.

A DWP spokesperson said: “We support millions of disabled people every year and the reforms in the Health and Disability White Paper will improve the experience of the benefits system for disabled people.

“Many people who have the LCWRA top-up will become eligible for PIP. Transitional protection will be provided to those not in receipt of PIP, so that nobody will see a financial loss as these reforms come into place.”