Universal Credit payments increased from this week, working out to more than £5,000 per year for some claimants - but there's a catch. From Monday, April 6, the standard rate saw an above inflation boost as part of an overhaul of the benefits system.

The basic rate for single people aged 25 and over rose from £400.14 a month to £424.90 per month and will increase further, adding an additional £760 per year compared to 2024 by the end of the decade. This cohort has the largest share of claimants, and payments amount to approximately £5,098.98 over a 12-month period. For couples, the rates have risen from £497.55 to £528.34 for those under 25, and for over-25s, the rate has jumped from £628.10 per month to £666.97.

From Monday, Universal Credit's standard allowance was also increased from £316.98 per month to £338.58 for a single person aged under 25.

But in a change the Government argues will remove incentives that "discourage work and trap people on benefits" the Universal Credit "Health Element" is being markedly reduced for millions of Britons.

UC health has been cut almost in half to £50 a week (£217.26 per month) and frozen for new claimants without the most serious health challenges from this week. However, the cut doesn't apply to existing claimants.

It comes as the government looks to bring down Britain's enormous welfare bill, which health-related claims play a major part in.

Ministers say they have sought to rebalance the system by scrapping the unpopular two-child benefit cap element of the benefit, and expanding incentives to seek work without risking losing Government support. However, critics claim the UC health change will leave many already vulnerable Britons worse off.

The Department for Work and Pensions (DWP) said in its announcement of the new rules coming into force that those with the most severe, lifelong conditions, those nearing end of life, and all existing Universal Credit health claimants will continue to receive the higher rate.

"The system inherited from the previous Government means people receiving Universal Credit for health reasons are paid more than twice as much as a single person looking for work and aren't given the support to move closer to - or into - jobs," it said.

"The reforms - coming into force in April - will tackle these perverse incentives."

It noted: "Anyone affected by the changes to Universal Credit will be entitled to voluntary employment support, with more than 65,000 people with limited capability for work and work-related activity taking up the offer since March 2025 - exceeding the target," it added.

"And as the Government continues to bear down on the cost of living, the changes will also see almost four million households on the standard rate of Universal Credit receive a boost worth around £295 extra this year in cash terms, around £110 above inflation, for a single person aged 25 or over."

Minister for Social Security and Disability Sir Stephen Timms said: "The welfare system we inherited has for too long locked disabled people and people with long term conditions out of work.

"Laws coming into force today will change that, reducing projected expenditure on Universal Credit by almost £1 billion.

"Simultaneously boosting the standard allowance and investing £3.5 billion in employment support means we're creating a welfare system that backs people to work and helps them build a better future."