The Department for Work and Pensions (DWP) is rolling out significant changes to Universal Credit in 2024, offering a welcome financial boost for claimants.
One of the most impactful updates is the reduction in repayment deductions from 25% to 15%, leaving claimants with more money for essential expenses.
Combined with a 1.7% increase in benefit payments, these changes aim to provide much-needed relief to over 1.2 million households, resulting in up to £420 extra annually.
Here’s everything you need to know about the updates and how they might impact you.
Deductions
The most notable change is the reduction in the maximum deduction rate for debt repayments. Starting in April, the cap will drop from 25% to 15%, meaning claimants will keep more of their benefits.
This is particularly beneficial for those repaying advances or other debts through Universal Credit.
Why the Change Matters
By lowering deductions, the government hopes to reduce financial pressure on households. Instead of repaying large chunks of their benefits, claimants will retain a larger portion for basic needs like food, rent, and utilities.
Payment Increase
Alongside the deduction changes, Universal Credit payments will see a 1.7% increase. This means higher standard allowances for claimants in all categories, providing additional support to cover rising living costs.
Updated Monthly Standard Allowances
| Claimant Type | New Standard Allowance | Maximum Repayment (15%) |
|---|---|---|
| Single under 25 | £316.98 | £47.55 |
| Single 25 and over | £400.14 | £60.03 |
| Couple (both under 25) | £497.55 | £74.64 |
| Couple (both 25 and over) | £628.10 | £94.22 |
These adjustments reflect the government’s commitment to helping low-income households cope with inflation and rising expenses.
Extra Support for Carers
Carers also stand to benefit from increased financial aid through Universal Credit and Pension Credit.
Universal Credit Carer Element
Claimants providing care for someone with a disability or health condition can receive an extra £198.31 per month, totaling £2,379.72 annually.
Pension Credit Carer Allowance
For pensioners providing care, an additional £45.60 per week (or £2,371.20 annually) is available. This recognizes the critical role of carers and helps offset caregiving costs.
Impact of the Changes
Improved Financial Flexibility
Reducing deductions means claimants can better manage their budgets, prioritizing essentials over debt repayment.
Reduced Debt Pressure
While debts will be repaid at a slower pace, this ensures households aren’t left struggling to cover daily expenses.
Support for Carers
The added financial aid for carers acknowledges the unique challenges they face, offering stability for those providing essential support to others.
Key Takeaways
The DWP’s updates aim to balance financial relief and responsibility, ensuring claimants can meet immediate needs while managing debts sustainably.
To make the most of these changes:
- Review your Universal Credit payments starting in April.
- Consider how the increased allowances and reduced deductions can help with monthly budgeting.
- If you’re a carer, check your eligibility for the Carer Element or Pension Credit allowance.
These updates mark a positive shift in support for those on Universal Credit, helping households navigate financial challenges more effectively.
