DWP hands people on Universal Credit £420 boost thanks to rule change

More than ONE MILLION households are set to get a £420 budget boost in a Universal Credit change. The Department for Work and Pensions (DWP) will ensure people are £420 a year better off on average as a result of a change to Universal Credit set to be announced inthe Labour Party government Budget this week.

The measure is intended to primarily help the worst-off families. “It’s a downpayment on poverty reduction. It is unacceptable that people are in this kind of deep poverty, and this is a small victory for people in deep poverty,” one Whitehall source told the Guardian.

The measure, called the Fair Repayment Rate, is expected to come into force next April and will cap the amount that can be cut from benefit payments each month to repay short-term loans and debts. Ruth Talbot, Save the Children UK’s policy and advocacy adviser, said: “It is bold thinking from ministers and we know it will have a significant impact for families and put more money in their pockets for food, toys, clothes and books.”

READ MORE Met Office says snow could hit UK within days and explains where's set for flurries

The move would cap the level of monthly deductions to individuals’ universal credit standard allowance at 15 per cent, rather than the current 25 per cent. Helen Barnard, the director of policy at Trussell, said: “This would be a positive first step to tackling the appalling levels of hardship our community of food banks see every day. On its own, however, this is unlikely to significantly reduce the numbers of people forced to turn to food banks to survive.”

Save the Children estimates the measure could see single parents receive up to £39 more of their universal credit entitlement each month. For two-parent families, this could be up to £62. It comes after research showed almost half (44%) of those receiving universal credit have money automatically deducted.

Money was deductec at an average of £78 a month withheld from their payments. For a single person aged over 25 that represents a fifth of their entitlement.