Health and Disability White Paper published alongside Budget

The government published a policy paper, Transforming Support: The Health and Disability White Paper, at the same time as the Spring Budget on 15 March 2023¹. Its headline proposal is that the Work Capability Assessment will be abolished for disabled people making new claims for Universal Credit¹. The Chancellor described this as the biggest reform to the welfare system in a decade¹.

Under current rules, people must have a Work Capability Assessment and be found too ill to work in order to receive a higher level of help from Universal Credit. The proposal is to link that higher level of help to their existing disability benefits instead, which they will already have passed an assessment for¹. The paper sets out plans to separate the assessment of the level of an individual's disability from whether they are working, so that disabled people can work if they want to without fear of their benefits being adversely affected¹. A new voluntary scheme called Universal Support intends to help up to 50,000 disabled people a year find more work¹. As a White Paper, the policy areas it covers could take years to be implemented, if they ever are¹.

The Budget also changed conditions for people without health conditions. Those in the all work-related requirements group of Universal Credit will have their Administrative Earnings Threshold, the minimum they can earn without needing increased meetings with their work coach, raised from the equivalent of 15 hours of earnings at the national living wage to 18 hours¹. The couple rule, under which couples must earn the equivalent of 24 hours between them, is being removed so that each person must meet the new 18-hour threshold individually¹. The government expects sanctions to increase and has planned for this in its costings, including paying for more training for work coaches¹.

On childcare, the maximum help with childcare costs under Universal Credit rises from July 2023 to £951 a month for one child, from £646, and £1,630 a month for two or more children, from £1,108¹. The monthly amounts will also be increased by CPI inflation each year until 2027/28¹. Free childcare hours in England are staged:

Parents in England working over 16 hours a week, with both members of a couple needing to work those hours, will eventually be able to receive up to 30 hours free childcare a week for 38 weeks a year¹. From summer 2023, a parent moving into work or increasing their hours will be able to claim help with their first month's childcare costs before having to pay for it¹. Lead carers of children aged 1 and 2 will need to meet a work coach to prepare for returning to work, and parents of children aged 3 to 12 will need to look for work or increase their hours to meet their claimant commitment¹.

On household costs, the Energy Price Guarantee is extended for three more months, so the typical bill remains at £2,500 until the end of June 2023; from July, households pay the lower of the Ofgem Price Cap or the £3,000 typical guarantee until the end of March 2024¹. The £2,500 surplus earnings threshold for Universal Credit stays in place for another year¹. The transitional element for Severe Disability Premium claimants, so far £120, £285 or £405 a month without annual increases, will be increased by CPI inflation in April 2023 and each year until 2027/28¹. The freeze to the Local Housing Allowance for private renters remains¹.

Why it matters for households

For disabled people who have not yet claimed Universal Credit, the proposal would remove one assessment from the process, with entitlement to the higher health-related amount linked to disability benefits they already receive¹. The change is proposed for new claims only, and no start date is given in the paper¹. Existing claimants are not covered by the announcement as reported¹.

Working parents claiming Universal Credit see the maximum childcare they can reclaim rise from July 2023, and the free hours in England arrive in stages from April 2024¹. Parents who move into work or increase their hours can claim help with the first month's childcare costs before paying from summer 2023¹. In exchange, carers of children aged 1 and 2 face work coach meetings, and parents of children aged 3 to 12 face work search or increased hours requirements¹.

People in the all work-related requirements group must earn more before their work coach meetings increase, and couples must each meet the threshold rather than combining earnings¹. Energy bills for a typical household stay capped at £2,500 until the end of June 2023 rather than rising to £3,000 in April¹. Private renters affected by the Local Housing Allowance freeze may be able to apply for a Discretionary Housing Payment from their local authority to cover a shortfall¹. Free calculators and advisers can help with checking what you are entitled to.

What happens next

The White Paper is expected to be debated over the following months and years, and its policies could take years to implement¹. The Universal Credit childcare maximum rises in July 2023, and the first stage of free childcare hours begins in April 2024¹. The Energy Price Guarantee extension runs to the end of June 2023, with the lower of the Ofgem Price Cap or the £3,000 typical guarantee applying from July until the end of March 2024¹. The transitional element for Severe Disability Premium claimants is increased by CPI inflation in April 2023 and each year until 2027/28¹.