Victims who have suffered injustices will no longer face reductions in their benefit claims due to receiving compensation, such as Universal Credit. Previously, individuals who obtained compensation following a criminal conviction risked losing access to certain means-tested benefits based on their income and savings. However, the existing policy that counted compensation payments as part of one’s capital for benefit eligibility has been eliminated.
This change impacts six means-tested benefits, including Universal Credit, Income-based Jobseeker’s Allowance, Income-related Employment and Support Allowance, Income Support, Housing Benefit, and Pension Credit. The Ministry of Justice recently raised the maximum compensation amount for victims of miscarriages of justice under the Miscarriage of Justice Compensation Scheme from £1 million to £1.3 million.
Sir Stephen Timms MP, the Minister for Social Security and Disability, emphasized the importance of rebuilding trust with individuals who have been failed by the system. He acknowledged that while lost time cannot be recovered, providing support to restart their lives is crucial for moving forward. Additionally, Alex Davies-Jones, the Minister for Victims and Violence Against Women and Girls, highlighted the significant impact of miscarriages of justice on individuals and emphasized that improved benefit support and the increased compensation cap will offer essential financial restitution and recognition to those affected.
For recipients of Universal Credit with savings and investments exceeding £6,000, benefits are typically reduced by £4.35 for every £250 saved between £6,000 and £16,000. Even if the saved amount does not precisely match £250 increments, deductions still apply. For instance, if an individual has £6,300 in savings, the excess £300 would result in a deduction of £8.70, with the first £250 incurring a £4.35 reduction and the remaining £50 facing the same deduction. These rules apply to both single claimants and couples.
Moreover, individuals with savings exceeding £16,000 are usually ineligible for Universal Credit. In cases where Tax Credits claimants are transitioning to Universal Credit, they may still qualify for Universal Credit for up to a year if their savings surpass £16,000.