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The Department for Work and Pensions (DWP) has confirmed plans to scrap the income-related Employment and Support Allowance (ESA) by spring 2026.
This is part of a wider Universal Credit (UC) reform designed to simplify the benefits system and bring different forms of financial support under one umbrella.
From March 2026, all ESA claimants will be transferred to Universal Credit’s Health Element, with the transition overseen by Minister for Social Security and Disability, Sir Stephen Timms.
These changes will affect millions of households, particularly those with health conditions or disabilities who currently rely on ESA support.
What is Changing?
- Income-related ESA will end by March 2026.
- Existing claimants will be migrated to Universal Credit’s Health Element (UC Health Element).
- From April 2026, safeguards will ensure ESA claimants not yet migrated have their ESA rates adjusted to match UC’s Limited Capability for Work and Work-Related Activity (LCWRA) element.
- The overhaul aims to streamline support while aligning payment structures across different benefits.
Why the Overhaul?
The move comes against a backdrop of financial hardship in the UK, with:
- 13.9% of households facing food insecurity as of January 2025.
- Energy costs hitting £3.9 billion by the end of 2024.
- Wages remaining flat while living expenses stay elevated.
Meanwhile, an estimated £23 billion in benefits goes unclaimed each year, highlighting the need for a simpler system that ensures more households get the support they are entitled to.
Universal Credit vs ESA – Key Differences
| Aspect | ESA (Ending March 2026) | Universal Credit (From 2026) |
|---|---|---|
| Main Component | Income-related ESA | Universal Credit Health Element |
| Support Component (LCWRA) | Up to £205 per month | Reduced to £50 per month for new claimants |
| Annual Uprating | Linked to inflation adjustments | Minimum 2.3% annual rise until 2029 |
| Transition Deadline | March 2026 | All claimants migrated by this date |
| Safeguards | ESA aligned with UC rates from April 2026 | Protection for those not yet migrated |
Impact on Claimants
- Existing ESA recipients: Those already on ESA will be migrated automatically and receive equivalent support under Universal Credit’s Health Element.
- New applicants: The support will be significantly reduced, with the health component dropping from £205 to £50 per month, and this freeze will last until 2029.
- Current benefit recipients: Payments will continue as scheduled, with no changes to timetables in September 2025, as no bank holidays fall in the month.
Other Related Benefit Updates
- Working-age benefits, including UC, PIP, Carer’s Allowance, and Attendance Allowance, saw a 1.7% increase in April 2025.
- State Pensions rose more substantially by 4.1%, adding £472 annually, safeguarded by the triple lock system.
- Under Labour’s new welfare legislation, Universal Credit will rise annually above inflation until 2029, ensuring long-term support stability.
The DWP’s decision to scrap ESA by March 2026 and transfer claimants to Universal Credit’s Health Element marks a major change in the UK welfare system.
While existing claimants will be protected with equivalent rates, new applicants face a sharp cut, with the health element reduced to £50 per month until 2029.
This overhaul is part of efforts to simplify benefits, close support gaps, and ensure fairer treatment—but for many, it will mean lower financial assistance unless they qualify for additional UC elements.
FAQs
When will ESA end under the new reforms?
The DWP will scrap income-related ESA by March 2026, moving all claimants to Universal Credit’s Health Element.
How much will new claimants receive under Universal Credit?
The health component drops from £205 to £50 per month for new applicants, frozen until 2029.
Will existing ESA claimants lose out?
No, existing claimants will be protected. Their payments will be mirrored with UC rates, ensuring no immediate financial disadvantage.