DWP benefit changes in 2025 in full – every rate increase listed

The benefits system in the UK is ever-evolving – and 2025 is set to be no exception with a number of changes already announced.

These can have serious impacts on people who receive benefits, so it’s important to stay informed and know what you’re entitled to and how to receive it. So far, the Department for Work and Pensions has announced that the Carer’s Allowance earnings limit will increase to £196 per week from April 2025.

Alongside this, the budget also included a number of announcements about Universal Credit. Here are all the changes to benefits coming in 2025.

Carer’s Allowance

The biggest news story for carers was the announcement that the Carer’s Allowance earnings limit will increase to £196 per week from April 2025. This is equivalent to working 16 hours at National Living Wage.

The earnings limit is the maximum amount a carer can earn without losing entitlement to Carer’s Allowance. This increase of around £45 on the current earnings limit is the biggest increase since Carer’s Allowance began back in 1976.

The government has also committed to align future National Living Wage and earnings limit increases.

Universal Credit

  • Confirming that the managed migration of people on income-related Employment and Support Allowance will be brought forward. This will now start from September 2024, and complete during 2026.
  • Capping the maximum amount that can be deducted from a Universal Credit award to repay a debt or loan. The maximum deduction will drop from 25% to 15% of that claimant’s standard allowance. This allows Universal Credit claimants to repay debts or loans by making smaller payments over a longer period of time.
  • Amending the Universal Credit severe disability premium transitional protection rules to better support those moving from supported or temporary accommodation into rented housing.

Other changes

And other changes included:

  • £1 billion of funding to local authorities to extend the Household Support Fund and Discretionary Housing Payments beyond April 2025. These schemes help low-income households facing hardship and financial crisis, including supporting them with the cost of rent and other essentials.
  • Extending the current Help to Save scheme until April 2027 and extending eligibility to all in-work Universal Credit claimants. Under this scheme, low-income savers can get a government bonus of 50p for every £1 they save in a special account.
  • £240 million funding for new pilot schemes to help people move back into work.
  • Scrapping plans to base the high-income Child Benefit charge (where Child Benefit is clawed back via income tax) on a household’s joint income, rather than on individual income.
  • Funding a new package of anti-fraud and error measures. This includes recruiting an additional 3,000 staff, introducing new legal powers for the Department for Work and Pensions, and requiring Universal Credit claimants to make periodic redeclarations of their household circumstances.
  • State Retirement Pension and Pension Credit payment rates will increase by 4.1% from April 2025. Working age benefits will only increase by 1.7%.
  • The Chancellor also announced that the government intends to set out planned reforms to the health and disability benefits system early next year.
Image Credits and Reference: https://www.examinerlive.co.uk/news/cost-of-living/dwp-benefit-changes-2025-full-30556596

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