500,000 People On Universal Credit May Have £390 Wiped From Bank Account

28th October 2023

The Institute for Fiscal Studies (IFS) warns around hundreds of thousands of people could see their limited capability for work and work-related activity (LCWRA) payments cut.

A Universal Credit change could see 520,000 claimants lose out £390 a month. Around 520,000 claimants could see their limited capability for work and work-related activity (LCWRA) payments stopped if the government's new planned Universal Credit reforms come into place, Birmingham Live reports

The Institute for Fiscal Studies (IFS) warns around hundreds of thousands of people could see their limited capability for work and work-related activity (LCWRA) payments cut. 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."

The government has proposed changes to work capability assessments, with the aim of reducing the number of working-age individuals assessed as having a "limited capability for work-related activity" (LCWRA), which entitles them to incapacity benefits without any requirements to prepare or look for employment. The government has suggested changes to the work capability assessment.

It would include mobilising, continence, and social engagement and getting about activities used to judge people's capability. These will reduce the threshold required in order for someone to be judged as able to prepare for work, according to the IFS. Not only will claimants lose out on the additional income (typically almost £400 per month) that LCWRA claimants are entitled to, they will also be required either to prepare for work or to search for a job in order to keep receiving benefits.

Around 740,000 work capability assessments took place last year, with approximately two-thirds of decisions assigning or keeping individuals in the LCWRA group.