Significant changes to Universal Credit will take effect from April 2025, impacting millions of claimants across the UK. The Department for Work and Pensions (DWP) is introducing new rules aimed at improving the system’s efficiency, particularly regarding how claimants report changes in their circumstances.
According to Manchester Evening News, these adjustments will also affect payment rates and debt deductions. With further welfare reforms expected later this year, claimants are advised to stay informed about how these changes might impact their financial situation.
Stricter Reporting Requirements for Universal Credit Claimants
Starting in April 2025, Universal Credit claimants in the UK will be required to confirm any changes in their circumstances more frequently. The Department for Work and Pensions (DWP) has announced that all recipients must periodically redeclare their circumstances, a shift aimed at reducing errors and overpayments.
As of January 2025, there are 7.5 million people claiming Universal Credit, an increase of 1.1 million compared to the previous year. This reflects the growing reliance on the benefit system, particularly among those who do not have work requirements.
Under the new rules, claimants will receive prompts from the DWP to confirm whether they have experienced any changes that could affect their entitlement.
These updates will be processed as usual, but the frequency of these declarations will initially be tested before a final schedule is determined.
Sir Stephen Timms, Minister for Social Security and Disabilities, stated:
“As announced at the Autumn Budget 2024, the department will prompt Universal Credit claimants to confirm whether they have had a change in circumstances that might affect their claim. Any changes in circumstances declared will be processed and verified in the usual way.
A rollout of this initiative will commence in April and testing will help determine frequency.”
Failure to report changes could lead to claimants receiving overpayments, which they would be required to repay in full, potentially along with a £50 fine.
Payment Adjustments and Debt Deductions
In addition to the new reporting requirements, Universal Credit payments will increase by 1.7% in April, reflecting the inflation rate recorded in September 2024. While this is a standard annual uprating, some campaigners had urged the government to consider a higher increase, given that inflation had exceeded 2% in previous months.
A key financial change involves reducing third-party deductions from Universal Credit payments. Currently, up to 25% of a claimant’s payment can be deducted to cover debts or arrears.
Starting from 7 April 2025, this maximum deduction will drop to 15%, providing more financial relief to those affected by previous overpayments or outstanding debts.
Addressing Economic Inactivity and Employment Support
The UK government is introducing additional measures to support individuals, particularly those with disabilities or fluctuating health conditions, in securing and maintaining employment.
According to Employment Minister Alison McGovern, these initiatives will include expanded support from Work Coaches and Disability Employment Advisers at Jobcentres, as well as Access to Work grants to help cover costs related to workplace adjustments for disabled individuals.
Additionally, employment advisors will be available in NHS Talking Therapies and Individual Placement and Support programmes in primary care to provide further assistance.
The DWP has allocated £240 million to encourage workforce participation, aiming to move closer to the government’s long-term target of an 80% employment rate.
This comes as the number of claimants under the “no work requirements” category continues to rise.
Government’s Economic Plans and Future Reforms
The UK government has allocated £110 million this year to support the implementation of these changes, aiming to reduce benefit expenditure by £250 million by 2029-2030.
The new Universal Credit verification system is expected to minimise incorrect payments while ensuring eligible claimants receive the correct support.
A public consultation on welfare reform is expected in spring 2025, which may introduce further adjustments to the Universal Credit system and employment support measures.
For those currently on Universal Credit, experts recommend keeping records of any changes in employment, housing, or income, as well as responding promptly to DWP notifications to avoid potential issues with payments.
Additionally, seeking advice from welfare support organisations can help claimants navigate any uncertainties regarding their entitlements. Halide Kalfaoglu, benefits expert at Turn2us, advised claimants to stay proactive in managing their claims and understanding how policy changes may affect them.
“If you’re claiming Universal Credit, it’s important to stay on top of any changes in your circumstances that might affect your claim, for example if you move home or have a child.
Keep records of any updates, respond quickly to DWP requests, and seek advice if you’re unsure what a change means for your payments. Getting the right support can help you avoid issues later on.”
With these policies set to take effect next month, further refinements may follow, particularly after the initial testing phase of the new periodic redeclaration system.
