Budget 2024 Universal Credit rule change affects 1.2 million households

The Autumn Budget was announced today by Chancellor Rachel Reeves.

In the last Budget, the limit on deductions from Universal Credit payments to repay debt was reduced. Labor Chancellor Rachel Reeves confirmed that the maximum amount that can be deducted from the standard allowance will drop from 25% to 15% from April 2025.

Currently the DWP and other third parties can claw back 25% of the Universal Credit standard benefit payment to recover any debts a person may have. This move, known as the Equitable Repayment Rate, is designed primarily to help the most financially vulnerable families.

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This change was first reported earlier this week, with an estimated 1.2 million households expected to benefit, including 700,000 families with children. This could increase their income by up to £420 a year, according to reports Mirror.

Chancellor Rachel Reeves today announced the Labor government’s first budget. Britain’s first female chancellor will speak after Prime Minister’s Questions this afternoon and set out the government’s economic agenda.