Reduced Earnings Allowance 2026/27: rates, calculator and Retirement Allowance

Last updated 26 September 2026 · By Mustafa Bilgic · Rates from the DWP list of benefit and pension rates 2026 to 2027, rules from Schedule 7 to the Social Security Contributions and Benefits Act 1992

REA was introduced on 1 October 1986, replacing Special Hardship Allowance, and new entitlement stopped for accidents from 1 October 1990, so most people who get it today have had it for many years. This page explains how the amount is worked out, the renewal rule that can end it for good, what happens at State Pension age, and how it affects tax and other benefits. The calculator applies the statutory maximum and the Retirement Allowance rules to your figures.

REA rates for 2026/27

The maximum rose from £90.12 to £93.56 a week in April 2026, in line with Industrial Injuries Disablement Benefit, because the law fixes it at 40% of the maximum disablement pension. Retirement Allowance is capped at 10% of the same maximum.

Who can get Reduced Earnings Allowance

Paragraph 11 of Schedule 7 and the DWP's technical guidance set these conditions:

• Date: the accident happened before 1 October 1990, or the prescribed disease started before that date. There is no REA for a disease added to the list of prescribed diseases on or after 10 October 1994, whatever the date it started.
• Assessment: your disablement is assessed at 1% or more. That is lower than the 14% normally needed for Industrial Injuries Disablement Benefit, so REA can be paid on its own.
• Regular occupation: because of the injury or disease you cannot follow your regular occupation, and you either are likely to remain permanently unable to, or have been unable to at all times since the end of the first 90 days (Sundays not counted).
• Other work: you cannot do other suitable work with an equivalent standard of pay. Only employed work counts as the comparison.

If you have more than one accident or prescribed disease, you can claim REA for each one. For pneumoconiosis, the guidance says that a person who leaves their regular occupation on medical advice about dust conditions is usually treated as unable to continue in it.

How REA is worked out

REA is paid at a rate set by comparing the probable standard of pay in your regular occupation with the pay of suitable work you are likely to be able to do. The comparison takes account of your reasonable prospects of promotion in the regular occupation. The DWP may ask current and former employers for pay details, and if your regular occupation no longer exists it may use an index of earnings from the Annual Survey of Hours and Earnings.

The difference is paid in full up to the maximum. If you have more than one REA award, REA and Industrial Injuries Disablement Benefit together cannot exceed the 140% rate, which is £327.46 a week in 2026/27 on our calculation. REA is awarded for a set period, and the DWP sends a renewal form before it ends.

REA at State Pension age and Retirement Allowance

If you are in regular employment when you reach State Pension age, REA carries on for as long as you stay in regular employment. The guidance defines regular employment as working under a contract of service for an average of 10 hours a week or more over 5 consecutive weeks or more.

When you have reached State Pension age and give up regular employment, REA stops and Retirement Allowance takes its place, provided your REA was at least £2.00 a week. Retirement Allowance is the lower of 25% of the weekly REA you were last entitled to and 10% of the maximum disablement pension, which gives a ceiling of £23.39 a week in 2026/27. A fraction of half a penny or more is rounded up. It is paid for life, only one award is made however many REA awards you had, and you do not need to claim: the DWP writes to you before State Pension age. A small group keeps REA itself for life at a frozen rate: people who, on 10 April 1988 or 9 April 1989, had reached pensionable age, had retired from regular employment and were entitled to REA.

Worked examples

Partial loss. A former roofer injured in 1988 now works in a warehouse for £560 a week. Roofing work of the standard he would have reached pays £620. The difference is £60.00, below the maximum, so REA is £60.00 a week, or £3,120.00 over 52 weeks.

Loss above the maximum. A former electrician's regular occupation would pay £750 a week and the suitable work she can do pays £400. The £350 difference is capped, so REA is £93.56 a week. When she reaches State Pension age and stops regular work, 25% of her REA is £23.39, which equals the ceiling, so Retirement Allowance is £23.39 a week.

Small award. A person getting £50.00 a week of REA who gives up regular employment after State Pension age receives Retirement Allowance of £12.50, which is 25% of £50.00. These examples are our own calculations from the published rules.

Tax and other benefits

REA and Retirement Allowance are part of industrial injuries benefit under section 94 of the Social Security Contributions and Benefits Act 1992, and section 677 of the Income Tax (Earnings and Pensions) Act 2003 lists industrial injuries benefit, apart from industrial death benefit, among the benefits on which no Income Tax is charged. REA is not worked out from your savings or household income, and the DWP says it does not affect National Insurance benefits such as contribution-based Employment and Support Allowance and Retirement Pension. It can reduce income-related benefits, including Universal Credit, Pension Credit, Housing Benefit and income-related Employment and Support Allowance.

If you also receive a police injury pension, REA for the same injury is deducted from it: see our police injury pension calculator. For a civil claim against a negligent employer, loss of earnings is valued differently: see loss of earnings claims.

How to claim and report changes

Ask the Barnsley Industrial Injuries Disablement Benefit Centre on 0800 121 8379 for claim form BI103. GOV.UK says to claim straight away, and the DWP's guidance warns that you could lose benefit for any period more than 3 months before the date of your claim. Tell the Barnsley centre at once if you start or stop work, your earnings or occupation change, or you are over pension age and stop working an average of 10 hours a week. REA is not paid while you are in prison, and on a temporary visit to a country outside the European Economic Area it can usually be paid for the first 3 months.

In Northern Ireland, nidirect gives the same £93.56 maximum and a claim form BI 103 from the Industrial Injuries Branch.

Sources and methodology

The rates were read from the DWP list for 2026 to 2027 and checked against the 40% and 10% rules in Schedule 7. The calculator applies paragraph 11(10) (the 40% cap), paragraph 13(2), (4) and (6) (Retirement Allowance, the £2 threshold and the rounding) and the Industrial Injuries Disablement Benefit rounding rules, and was tested on the cap, the threshold and the half-penny rounding.

• Reduced Earnings Allowance guide, on GOV.UK.
• Benefit and pension rates 2026 to 2027, Department for Work and Pensions, on GOV.UK.
• Industrial Injuries Disablement Benefits: technical guidance, sections 8 and 9, on GOV.UK.
• Social Security Contributions and Benefits Act 1992, section 94 and Schedule 7 paragraphs 11 to 13, on legislation.gov.uk.
• Income Tax (Earnings and Pensions) Act 2003, section 677, on legislation.gov.uk.
• Reduced Earnings Allowance in Northern Ireland, on nidirect.

Frequently asked questions

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