DWP confirms Universal Credit payments change from April 30 | Personal Finance | Finance

April 14, 2025 2,902

The Department for Work and Pensions (DWP) has unveiled new changes to the Fair Repayment Rate for Universal Credit claimants. Chancellor Rachel Reeves announced the Fair Repayment rate during the Autumn Budget in October, with plans for it to take effect from April 30.

This permanent change will reduce the overall deductions cap for Universal Credit from 25 per cent to 15 per cent of a claimant’s standard allowance. The DWP stated that this new measure will boost households’ income from their Universal Credit award by an average of around £35 each month, or £420 over the 2025/26 financial year.

The UK Government believes that all parents have a duty to support their children and recognises the overall impact child support maintenance has in lifting children out of poverty. To support this, a commitment was made to move the child maintenance deduction higher up the regulated priority order, reports the Daily Record.

This would ensure that when the Fair Repayment Rate is implemented, it would not reduce the current number of child maintenance deductions being made from a Universal Credit award. In support of this commitment, the DWP deemed it necessary to implement further protection to ensure the child maintenance deduction can be made even if this would result in the overall deductions cap of 15 per cent being exceeded.

DWP recognises the vital financial support that child maintenance payments provide. This regulatory change, coupled with the policy decision to exceed the new overall deductions cap of 15 per cent where applicable, will continue to enable child maintenance payment when other payment methods have failed or are not feasible.

This regulatory modification will be temporarily in place for a year as the DWP aims to gather more evidence on the impact of the child maintenance deduction change on Universal Credit households, particularly its ability to address other debts.

The collected evidence will determine whether this temporary change should become permanent or if a different approach is required.

Universal Credit and other DWP-related benefits saw a 1.7 per cent increase on April 7. As most benefits are paid in arrears, claimants will not see the full uprating until the next assessment period has been completed.