Statutory Instrument 2026/946 makes a narrow but practical change to Universal Credit administration. The Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Claims and Payments) (Amendment) (No. 2) Regulations 2026 were made at 10.30 a.m. on 1 September 2026, laid before Parliament at 3.00 p.m. the same day, and come into force on 22 September 2026. According to the Explanatory Note published on legislation.gov.uk, the purpose is to adjust the reclaim rules for people whose entitlement to Universal Credit ends because of earnings while they are on a funded employment scheme. The measure addresses a specific administrative problem: supported employment can move a claimant out of entitlement, even where the work itself is time-limited.
The amendment sits within regulation 32A of the 2013 Claims and Payments Regulations. Before this change, that provision allowed a person to be treated as claiming Universal Credit for up to five months after the assessment period in which earnings caused them to lose entitlement. That matters because the reclaim mechanism can support an automatic re-award if entitlement returns within that period. The new instrument does not replace that five-month structure. Instead, it preserves it as the default rule and then creates a limited extension for a defined group of claimants. In policy terms, this is a targeted adjustment to the operation of reclaims rather than a wider change to entitlement, conditionality or payment rates.
The legal amendment inserts new paragraphs (3) and (4) after regulation 32A(2). Where the month that would otherwise be the fifth month arrives and the claimant is still a participant in a funded employment scheme, the existing five-month maximum is extended up to and including the first month in which the claimant is no longer participating. For joint claims, the drafting is equally specific. The extension applies where either member of the couple is on the funded employment scheme in the month that would otherwise be the fifth month, and it continues until the first month in which neither claimant is a participant. That detail will matter in cases where one member of a couple remains in subsidised work after the other has left.
The new definition of a funded employment scheme is tied to section 2(1) of the Employment and Training Act 1973. The regulations state that the claimant’s wages must be funded, in whole or in part, under arrangements made by the Secretary of State or by the Scottish or Welsh Ministers. That keeps the rule closely linked to formal statutory employment and training powers. In practical terms, the amendment is aimed at publicly backed work schemes where wages are subsidised for a period and may temporarily move a claimant out of Universal Credit. Without this extension, the reclaim window could expire while the claimant was still on the scheme, even though the end of that wage support might later bring them back within entitlement.
For claimants and advisers, the operational effect is straightforward. If earnings from the funded employment scheme later cease, the reclaim route can remain available beyond the ordinary five-month limit, allowing an automatic re-award of Universal Credit where the conditions in regulation 32A are met. The Explanatory Note identifies that outcome as the central purpose of the instrument. This is likely to be most relevant for work coaches, welfare advisers and delivery bodies involved in employment programmes that use wage subsidies or other public funding arrangements. The change reduces the risk that a claimant will lose the benefit of the reclaim mechanism simply because the supported job lasted into the fifth month after entitlement ended.
The instrument was made under sections 1(1) and 189(1), (4) and (6) of the Social Security Administration Act 1992. It extends to England and Wales and Scotland, and it was signed by Smith of Malvern, Minister of State at the Department for Work and Pensions. Under section 173(1)(b) of the 1992 Act, the Social Security Advisory Committee agreed that the proposals should not be referred to it. No full impact assessment has been produced. The accompanying note states that no impact, or no significant impact, on the private, public or voluntary sectors is foreseen. That points to a technical amending instrument rather than a wider redesign of Universal Credit, but from 22 September 2026 it will still alter how earnings-related exits and reclaims are handled for claimants on funded employment schemes.