Victims who have suffered from injustices will now not see their compensation affect their ability to claim benefits such as Universal Credit. Previously, individuals who received compensation following a criminal conviction could potentially become ineligible for certain means-tested benefits based on their income and savings.
For instance, eligibility for Universal Credit was previously impacted if an individual had savings or investments exceeding £16,000. However, a recent change has eliminated the rule that included compensation payments as part of one’s capital.
This adjustment applies to 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 (MOJ) raised the maximum compensation 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 those let down by the system.
Alex Davies-Jones, the minister for victims and violence against women and girls, highlighted the impact of miscarriages of justice on individuals’ lives and the significance of improved benefit support and the increase in the compensation cap.
Regarding Universal Credit claims, individuals with more than £6,000 in savings may experience reductions in their benefits. A deduction of £4.35 is applied for every £250 over £6,000 up to £16,000. Even if the saved amount does not align exactly with £250, deductions will occur accordingly.
For instance, if an individual has £6,300 in savings, the first £6,000 remains unaffected, and the remaining £300 incurs a deduction of £8.70. These calculations are relevant for both single claimants and couples.
Furthermore, individuals generally lose eligibility for Universal Credit if their savings exceed £16,000. However, those transitioning from Tax Credits to Universal Credit may still qualify for up to a year if their savings surpass £16,000.