Universal Credit Recipients to Receive £420 Boost as Fair Repayment Rate Changes
As of April 30, a significant change is coming into effect for Universal Credit claimants across the UK, with approximately 1.2 million households expected to receive an additional £420 annually. This boost is a result of alterations to the Fair Repayment Rate, which determines the proportion of benefit payments deducted to offset debts. According to the Department for Work and Pensions (DWP), this rate will be reduced from 25% to 15%, providing much-needed relief to individuals struggling with debt while on benefits.
The DWP has confirmed that this adjustment will benefit around 1.2 million of the nation’s most impoverished households, including approximately 700,000 family units with children. As reported by the Express, this change is part of the government’s ambitious Plan for Change, aimed at uplifting living standards nationwide. Chancellor of the Exchequer Rachel Reeves stated, "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."
The introduction of the new rate aims to ensure that Universal Credit recipients facing deductions due to debts can manage their repayments in a more manageable manner. It is estimated that over 2.8 million households currently experience regular deductions from their Universal Credit allowances. Work and Pensions Secretary Liz Kendall commented, "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 added, "We’re delivering meaningful change to ensure everyone has a fair chance, the support they need, and real hope for the future."
These changes are part of the government’s Get Britain Working White Paper, which targets an employment rate of 80% nationwide. This initiative involves a range of measures, including the creation of new jobs, an overhaul of careers services, and major reforms to Jobcentres, alongside the introduction of a ‘youth guarantee’ committed to ensuring young individuals engage in work or education. Furthermore, the Household Support Fund (HSF) is set to receive an extension and a £742 million boost for an additional year. The fresh funds are designed to enable local councils to increase financial assistance for those on low incomes, providing crucial aid in securing necessities such as food, utilities, and essential items, whilst simultaneously fighting the risk of poverty.
For individuals facing difficulties in managing debt, official guidelines suggest that benefit recipients can request a financial hardship decision if they find themselves unable to cope with repayments while on Universal Credit. This measure could potentially reduce the portion of their benefits directed towards clearing debt obligations. To be eligible for this decision, you must have used your Universal Credit to cover expenses such as Budgeting Loan repayments, benefit debt, advances, or rent arrears, provided they’re deducted at a rate higher than 10% of the standard allowance.
The Express reports that more information on assistance with debt while claiming Universal Credit can be found on the government’s website. As the changes come into effect, it is essential for Universal Credit recipients to be aware of the support available to them. By providing a more manageable repayment rate and increasing financial assistance, the government aims to ease the cost of living and improve living standards for some of the most vulnerable households in the UK.
As the government continues to implement its Plan for Change, it is clear that addressing debt and financial hardship remains a priority. With these changes, individuals struggling with debt while on benefits can expect to receive more support and a fairer chance to get back on their feet. The reduction in the Fair Repayment Rate and the extension of the Household Support Fund demonstrate the government’s commitment to improving the lives of those who need it most.
The changes to the Fair Repayment Rate and the Household Support Fund are a step in the right direction for individuals struggling with debt and financial hardship. By providing more support and assistance, the government can help ensure that everyone has access to the resources they need to thrive.
(Source: Express)
