1.2 Million Households To Receive Up to £420 Pay Rise In Universal Credit Change

• Universal Credit claimants will see a £420 pay increase
• Department for Work and Pensions to lower the deduction cap from 25% to 15%
• 700,000 families with children to benefit from the new scheme

A significant change to Universal Credit is set to come into effect in just a few days, with the Department for Work and Pensions (DWP) introducing a new cap on deductions that will benefit 1.2 million households. From April 30, the cap will drop from 25% to 15% of the standard allowance, providing much-needed relief to claimants, including 700,000 families with children.

Currently, the DWP deducts up to 25% of a claimant’s Universal Credit allowance to pay off various debts. This includes repayments for benefit advances, tax credits, rent arrears, and utility bills. However, the new Fair Repayment Rate will allow those affected to keep an additional £31.70 per month, adding up to an extra £420 a year.

Despite the changes, claimants who are subject to fraud penalties or sanctions may still have deductions higher than 25%. It’s crucial for claimants to check their circumstances to see how this adjustment could impact their payments.

Conor Lawlor, a benefits expert at Turn2us, said: "While the new cap will provide essential financial relief, claimants should ensure that they are fully aware of how deductions apply to their individual situations."

Tom Church, Co-Founder of LatestDeals.co.uk, said: “This is a crucial change for millions of families. It’s great to see the government acting to reduce the burden of debt repayments on Universal Credit claimants, but it’s vital that people check their eligibility and stay updated with any further changes.”