Starting from 22 July 2025, the UK Department for Work and Pensions (DWP) will no longer consider compensation payments from the miscarriage of justice scheme as income or capital when determining eligibility for means-tested benefits, including Universal Credit.
This significant policy shift aims to provide fairer access to financial support for individuals who have been wrongfully convicted and compensated.
Currently, individuals who receive payments through the miscarriage of justice compensation scheme may face reductions in benefits if the compensation is counted as capital. Under the new rules, however, such payments will no longer affect entitlement to essential support.
New Rules Set to Impact Claimants Nationwide
As of 22 July 2025, the DWP will no longer take compensation payments received through the miscarriage of justice compensation scheme into account when calculating eligibility for means-tested benefits. This includes vital payments like Housing Benefit, Universal Credit, and Income Support, which are typically dependent on an individual’s income and savings.
According to the DWP, individuals who receive such compensation payments will no longer be penalised in the same way, allowing them to claim their full entitlement to financial support.
The policy applies to individuals across Great Britain, with the same changes being implemented in Northern Ireland. This reform addresses longstanding concerns about fairness, ensuring that those who have been wronged by the justice system can access the benefits they are entitled to without financial penalty.
How Affected Individuals Should Respond
Individuals who have received compensation through the miscarriage of justice scheme and currently claim means-tested benefits will need to report their change of circumstances to the DWP. This includes benefits like Universal Credit, Pension Credit, Housing Benefit, income-based Jobseeker’s Allowance or income-related Employment and Support Allowance or Income Support.
Claimants must inform the department that they have received compensation and provide the necessary documentation, such as their compensation award notification.
According to the DWP, reporting this change will allow the department to adjust benefit calculations accordingly, ensuring that affected individuals are receiving the correct amount of financial support. The new regulations are designed to simplify the process and reduce unnecessary bureaucratic hurdles for claimants.
This change comes at a crucial time, as those who have been wrongly convicted and later exonerated often face significant challenges in rebuilding their lives.
By excluding compensation payments from benefit calculations, the DWP hopes to offer a more equitable system, ensuring that individuals are not penalised for receiving compensation for a past injustice.
