Latest news with #FairRepayment
Wales Online
3 days ago
- Business
- Wales Online
Universal Credit payment boost worth £420 for over one million people
Universal Credit payment boost worth £420 for over one million people The DWP changed how much money can be deducted from your Universal Credit payments and it means one million households in the UK will be better off in 2022 The Department for Work and Pensions (DWP) recently confirmed that over one million households grappling with debt will retain an average of £420 more of their benefits each year (Image: John Myers ) The Department for Work and Pensions (DWP) recently confirmed that over one million households grappling with debt will retain an average of £420 more of their benefits each year, following a change to Universal Credit implemented at the end of last month. The Fair Repayment Rate sets a cap on how much individuals in debt can have deducted from their benefits to repay what they owe. The maximum amount that could be taken from someone's Universal Credit standard allowance payment to repay debt was 25 per cent, but this was reduced to 15 per cent on April 30. This alteration applies to all assessment periods commencing on or after that date and means claimants due their monthly payments from May 30 will benefit from the reduction. It equates to an average of £420 extra a year for 1.2 million of the poorest households, including 700,000 households with children, whilst aiding people to pay down their debts in a sustainable manner. This is part of the UK Government's Plan for Change to put more money into people's pockets and enhance living standards and signifies the Government's initial step in a broader review of Universal Credit to ensure it continues to fulfil its purpose. Chancellor Rachel Reeves introduced the Fair Repayment Rate at the Autumn Budget, as part of wider efforts to elevate living standards, combat poverty, and tackle the cost of living crisis, reports the Daily Record. The Chancellor remarked: "As announced at the Budget, 1.2 million households will keep more of their Universal Credit and will be on average £420 better off a year. This is our plan for change delivering, easing the cost of living and putting more money into the pockets of working people." This comes amid revelations that nearly 2.8 million households experience reductions in their Universal Credit each month to address debts, with the updated rate aiming to balance debt repayment while ensuring individuals can still manage their essential expenses. In an assertion of the government's commitment to worker prosperity, Work and Pensions Secretary Liz Kendall stated: "As part of our Plan for Change, we are taking decisive action to ensure working people keep more of the benefits they're entitled to - which will boost financial security and improve living standards up and down the country." She further emphasised the government's dedication to improving prospects, saying, "We're delivering meaningful change to ensure everyone has a fair chance, the support they need, and real hope for the future." Article continues below The introduction of the Fair Repayment Rate joins a suite of ambitious efforts under the UK Government's Plan for Change, aiming to spark growth and broaden wealth across the nation. Spotlighting employment as a critical escape from poverty, the Labour Government unveiled the Get Britain Working White Paper, setting sights on an 80 per cent employment rate goal through major reforms to Jobcentres, the creation of a new employment and advice service, plus a youth guarantee ensuring young people are either gaining work experience or pursuing education. This is in addition to raising the National Minimum and National Living Wage to ensure that work is financially rewarding.
Daily Record
26-05-2025
- Business
- Daily Record
Universal Credit payment boost for over one million people this month
Households will benefit from an extra £420 this year following a DWP rule change. Reasons your Universal Credit may be cut by DWP The Department for Work and Pensions (DWP) recently confirmed that over one million households struggling with debt will get to keep an average £420 more of their benefits each year, under a change to Universal Credit which came into force at the end of last month. The Fair Repayment Rate places a limit on how much people in debt can have taken off their benefits to pay what they owe. The maximum amount that can be taken from someone's Universal Credit standard allowance payment to repay debt was 25 per cent, but was reduced to 15 per cent on April 30. The change affects all assessment periods that started on or after that date and means claimants due their monthly payments from May 30 will benefit from the reduction. It means an average of £420 extra a year for 1.2 million of the poorest households, including 700,000 households with children, while helping people to pay down their debts in a sustainable way. It forms part of the UK Government's Plan for Change to put more money into people's pockets and boost living standards and marks the Government's first step in a wider review of Universal Credit to ensure it is still doing its job. The Fair Repayment Rate was introduced by Chancellor Rachel Reeves at the Autumn Budget, as part of broader efforts to raise living standards, combat poverty, and tackle the cost of living crisis. The Chancellor said: 'As announced at the Budget, 1.2 million households will keep more of their Universal Credit and will be on average £420 better off a year. This is our plan for change delivering, easing the cost of living and putting more money into the pockets of working people.' With as many as 2.8 million households seeing deductions made to their Universal Credit award to pay off debt each month, the new rate is designed to ensure money is repaid where it is owed, and people can still cover their day-to-day needs. Work and Pensions Secretary Liz Kendall said: 'As part of our Plan for Change, we are taking decisive action to ensure working people keep more of the benefits they're entitled to - which will boost financial security and improve living standards up and down the country. 'We're delivering meaningful change to ensure everyone has a fair chance, the support they need, and real hope for the future.' The Fair Repayment Rate is one of a number of bold measures the UK Government is taking as part of its Plan for Change to kickstart growth and spread prosperity across the country. Viewing work as a key route out of poverty, the Labour Government set out the Get Britain Working White Paper - aiming to achieve its target 80 per cent employment rate by overhauling Jobcentres, introducing a new jobs and careers service, and launching a youth guarantee so every young person is earning or learning. This comes on top of increasing the National Minimum and National Living Wage to ensure being in work pays.
Daily Record
01-05-2025
- Business
- Daily Record
DWP confirms Universal Credit rule change set to boost income by £420 for over one million households
The Department for Work and Pensions (DWP) has announced that over one million households struggling with debt will get to keep an average £420 more of their benefits each year, under a change to Universal Credit which came into force on April 30. The Fair Repayment Rate places a limit on how much people in debt can have taken off their benefits to pay what they owe. The maximum amount that can be taken from someone's Universal Credit standard allowance payment to repay debt has been 25 per cent - but has now been reduced to 15 per cent. This will mean an average £420 extra a year for 1.2 million of the poorest households, including 700,000 households with children, while helping people to pay down their debts in a sustainable way. The change will be applied to all assessment periods that start on or after April 30. It forms part of the UK Government's Plan for Change to put more money into people's pockets and boost living standards and marks the Government's first step in a wider review of Universal Credit to ensure it is still doing its job. The Fair Repayment Rate was introduced by Chancellor Rachel Reeves at the Autumn Budget, as part of broader efforts to raise living standards, combat poverty, and tackle the cost of living crisis. The Chancellor said: 'As announced at the Budget, 1.2 million households will keep more of their Universal Credit and will be on average £420 better off a year. This is our plan for change delivering, easing the cost of living and putting more money into the pockets of working people.' With as many as 2.8 million households seeing deductions made to their Universal Credit award to pay off debt each month, the new rate is designed to ensure money is repaid where it is owed, and people can still cover their day-to-day needs. Work and Pensions Secretary Liz Kendall said: 'As part of our Plan for Change, we are taking decisive action to ensure working people keep more of the benefits they're entitled to - which will boost financial security and improve living standards up and down the country. 'We're delivering meaningful change to ensure everyone has a fair chance, the support they need, and real hope for the future.' The Fair Repayment Rate is one of a number of bold measures the UK Government is taking as part of its Plan for Change to kickstart growth and spread prosperity across the country. Viewing work as a key route out of poverty, the Labour Government set out the Get Britain Working White Paper - aiming to achieve its target 80 per cent employment rate by overhauling Jobcentres, introducing a new jobs and careers service, and launching a youth guarantee so every young person is earning or learning. This comes on top of increasing the National Minimum and National Living Wage to ensure being in work pays.
The Herald Scotland
30-04-2025
- Business
- The Herald Scotland
Universal Credit change and £420 boost for 1.2 million homes
It places a limit on how much people in debt can have taken off their benefits to pay what they owe. What is the Fair Repayment Rate? The Fair Repayment Rate was introduced by the Chancellor at the Autumn Budget, as part of broader efforts to raise living standards, combat poverty, and tackle the cost-of-living crisis. Chancellor of the Exchequer Rachel Reeves said: "As announced at the budget, from today, 1.2 million households will keep more of their Universal Credit and will be on average £420 better off a year. This is our plan for change delivering, easing the cost of living and putting more money into the pockets of working people. "With as many as 2.8 million households seeing deductions made to their Universal Credit award to pay off debt each month, the new rate is designed to ensure money is repaid where it is owed, and people can still cover their day-to-day needs." Recommended reading: How does it work in a Universal Credit assessment period? The maximum amount that can be taken from someone's Universal Credit standard allowance payment to repay debt has been 25% – but from today this is reduced to 15%. This will mean an average £420 extra a year for 1.2 million of the poorest households, including 700,000 households with children, while helping people to pay down their debts in a sustainable way. The change will be applied to all assessment periods that start on or after 30 April.
The Sun
29-04-2025
- Business
- The Sun
Over a million families on Universal Credit to get £420 boost TOMORROW – check if you get the benefit
UNIVERSAL Credit claimants will get a £420 increase in benefits payments from tomorrow as changes are introduced. The Department for Work and Pensions (DWP) has announced a change to the Fair Repayment Rate to come into effect April 30. 2 It is set to cap the amount that can be deducted from an individual's benefits payments each month to pay housing costs, short-term loans and debts. Currently, ongoing rent costs and arrears are processed and deducted automatically by the DWP's system through the existing Alternative Payment Arrangement. It covers a range of payments from benefit advances, historical over-payments of child tax credits, rent, council tax, as well as outstanding water and utility bills. The money is taken out of a claimant's Universal Credit standard allowance without notice each month, until the debt is fully repaid. However, a court ruling earlier in the year deemed the practice unlawful as many impacted were struggling, which came on top of the government's cuts to the winter fuel allowance. By dropping the Fair Repayment Rate from 25 per cent to 15 per cent, around 1.2 million households among the poorest around the UK are expected to benefit. A boost of around £35 a month or up to £420 a year could be claimed by households, including 700,000 with children. How will the cut work in practice? THE Universal Credit standard allowance is paid at four different rates: Single and aged under 25: £316.98 per month Single and aged 25 or over: £400.14 per month Joint claimants both aged under 25: £497.55 per month Joint claimants where one is aged 25 or over: £628.10 Therefore, if an individual under 25 faces a 25% deduction, their standard allowance will decrease by £79.25 per month, reducing their payment to £237.73 per month. However, if the same individual faces a 15% deduction, their standard allowance will decrease by £47.55 per month (£31.70 less than a 25% deduction), reducing their payment to £269.43 per month. Universal Credit deductions of over 25 per cent will remain if they are related to fraud penalties or sanctions. TYPES OF UNIVERSAL CREDIT DEDUCTIONS There are a number of reasons money is deducted from Universal Credit allowances by the DWP to help pay of debts. Five key changes to PIP & Universal Credit as Labour's benefits crackdown unveiled Benefits expert at Turn2us, Conor Lawlord, said: "These debts can accrue in several ways, including for Universal Credit and other benefit overpayments (even if the overpayment was made in error by DWP), benefit advances and recovering hardship payments. "The DWP can also deduct on behalf of third parties if a claimant is in debt to them, including for rent and service charge arrears, council tax arrears, court fines, child maintenance, and for utilities like electricity, gas and water." Not every deduction is compulsory, however, with some voluntary. There are six main forms of deductions: 1. ADVANCE PAYMENTS Some Universal Credit claimants may apply for an advance payment when first signing up. This is due to the delay in payment after starting a claim and being assessed for Universal Credit, known as the "five-week wait". The first payment usually comes a week after the end of your first assessment, but those in particularly financial hardship cannot afford to wait this long. Individuals struggling to pay for rent or food are therefore given an advance loan, which is expected to be paid back either within 24 months for a new claim, of six months in the case of a changing in circumstances. 2. BUDGET ADVANCE The Budget Advance is an interest-free loan that can be used to cover certain expenses for things like household furniture, equipment and clothing. The smallest amount that can be borrowed is £100, which changes dependent on circumstances and how much you need. You can get up to: £348 if you're single £464 if you're part of a couple £812 if you have children Repayments for budget loans are taken automatically from benefits, and the amount you repay is based on income. They should normally be repaid within a year, but is extendable by 18 months in exceptional circumstances. 3. UNIVERSAL CREDIT OVERPAYMENTS Overpayments accrue if you have been paid more Universal Credit than entitled to. They generally have to repaid, even if the overpayment was not your fault. Repayments are typically deducted at a maximum rate of 15 per cent from the monthly standard allowance if not receiving earned income. The maximum rate that can be deducted from Universal Credit for overpayments with some earned income is 25 per cent. 4. TAX CREDIT OVERPAYMENTS HMRC will be told to stop tax credits if you claim Universal Credit. Therefore, if you receive tax credits after having made a Universal Credit claim, you would be overpaid in tax credits. Any tax credit over-payments will subsequently be taken out of Universal Credit payments. 5. FRAUD AND SANCTIONS Deliberately not providing details about a change in circumstances for Universal Credit payments or giving false information is considered fraud. A fraud penalty or sanction will reduce your Universal Credit standard allowance. This can be up to 100 per cent of your standard allowance if you are single, or up to 50 per cent for each person in a joint claim. If a fraud penalty or sanction is being taken from your Universal Credit payments, no other repayment or deduction will be taken, except for last-resort deductions. 6. THIRD-PARTY DEDUCTIONS A third-party deduction is an amount taken from Universal Credit allowance and paid directly to a person or organisation who you owe money to. They can be taken without permission, to pay for things like housing costs, unpaid rates, or child maintenance, as well as to landlords or electricity suppliers. Only three third-party dedcations can be taken at a time. They are fixed at five per cent of the Universal Credit standard allowance. Rent deductions are fixed between 10 and 20 per cent. How to get free debt help There are several groups which can help you with your problem debts for free. Citizens Advice - 0800 144 8848 (England) / 0800 702 2020 (Wales) StepChange - 0800138 1111 National Debtline - 0808 808 4000 Debt Advice Foundation - 0800 043 4050 You can also find information about Debt Management Plans (DMP) and Individual Voluntary Agreements (IVA) by visiting or Speak to one of these organisations - don't be tempted to use a claims management firm. They say they can write off lots of your debt in return for a large upfront fee. But there are other options where you don't need to pay. 2
