Hundreds of disabled people are set to benefit from a £15,000 boost to a cap on funding provided through a flagship scheme to help people into work.
Work and Pensions Secretary Esther McVey has announced a £57,200 limit on funding awarded through Access to Work, a 36% rise on the existing cap of £42,100.
The UK Council on Deafness praised what it called the significant rise in the cap.
But campaigners are continuing to argue against the limit, which is subject to a legal challenge.
Ms McVey said: “We believe that disabled people should have every opportunity to thrive in the workplace, and the tailored support of Access to Work caters to every individual’s unique needs.
“By extending this grant we’re ensuring that many more disabled people can reach their career potential, which is a key part of our commitment to getting one million more disabled people in work by 2027.”
Access to Work provides cash payments to help disabled people find and keep jobs, paying for things such as transport, workplace adaptations and support workers.
The cap, which was introduced to new claimants in October 2015, will apply to existing claimants from April.
The announcement on Tuesday increases the cap from one and a half to two times the national average salary.
A legal challenge has been launched against the cap, which at the moment only applies to new claimants.
A report by Inclusion London last year found 90% of those affected will be deaf.
Ellen Clifford, campaigns and policy manager at the charity, said: “While we welcome the news that the Access to Work cap is to be increased, we remain opposed to the imposition of any form of cap.
“Capping the amount of support that an individual can receive through Access to Work discriminates against those with the highest support needs, effectively penalising those with certain impairments for being deaf or disabled.
“Though the cap is now higher, it is still set at an arbitrary, fixed limit whereas costs for highly specialised equipment and good quality professional interpreters tailored to an individual’s needs can exceed this amount or vary from year to year.”
Ms Clifford added that the cap was just one of a number of issues with the Access to Work scheme, as she called for an urgent review.
Ms McVey, in a written statement to Parliament, said the average spend by those claiming Access to Work had fallen from about £57,000 to around £45,000 each, ahead of the cap being introduced.
This suggested people were able to make better use of their funding while freeing up more than £2 million a year, she said.
“I am therefore persuaded that the principle of the cap is sound, balancing the need to provide support to the largest number of people, and at a significant level for some, with the need to make the best use of public funds,” said Ms McVey.
In a statement, the UK Council on Deafness said: “We are pleased to see that the Department for Work and Pensions has decided to significantly raise the Access to Work cap.
“This will help deaf people whose first language is British Sign Language (BSL) to access the communication support so vital to enabling them to thrive and succeed in the workplace.”
Mark Atkinson, chief executive at disability charity Scope, also said the increase in the cap was “very encouraging”.
A spokesman for Disability Rights UK said the increase was very welcome, adding: “However, we remain concerned that the cap does need to be more flexible.
“Whilst it is sufficient for most disabled people we think that flexibility is needed particularly regarding self-employed disabled people who may need expensive equipment to remain in employment.
“It should be possible for the cap to be exceeded in exceptional circumstances.”
A 2004 Government review suggested for every £1 of money spent on Access to Work, £1.48 was generated for the Treasury.
The same review recommended the scheme should be “transformed from being the best kept secret in Government to being a recognised passport to successful employment”.
The £57,200 cap will take effect from next month.