UPDATE: |DWP confirms change to Universal Credit payments from next month News

DWP will implement the change from the end of April

The Department for Work and Pensions (DWP) has announced new changes to the Fair Repayment Rate for those claiming Universal Credit.

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 is a permanent change that will lower 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 help households increase their 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 acknowledges 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.

The DWP acknowledges that child maintenance payments offer crucial financial support. This regulatory change, along with the policy decision to exceed the new overall deductions cap of 15 per cent where applicable, will continue to facilitate child maintenance payment when other payment methods have failed or are not feasible.

This regulatory adjustment will be temporarily in place for a year as the DWP seeks 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 gathered evidence will decide whether this temporary change should become permanent or if a different approach is needed.

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.

Universal Credit (monthly rates) 2025/26

Single claimant

• Under 25: £316.98 (from £311.63)
• 25 or over: £400.14 (from £393.45)

Couples

• Joint claimants both under 25: £497.55 (from £489.23)
• Joint claimants, one or both 25 or over: £628.10 (from £617.60)