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The Department for Work and Pensions (DWP)has announced changes to the Fair Repayment Rate (FRR) for those claiming Universal Credit.
Chancellor Rachel Reeves announced the Fair Repayment Rate during the Autumn Budget in October with plans for it to take effect from April 30. The rate means claimants on lower incomes keep more of their Universal Credit by lowering the overall deductions cap from 25 per cent to 15 per cent of a claimant’s standard allowance.
The DWP stated that this new measure will help households increase their income from their Universal Credit award by an average of around £35 each month, or £420 over the 2025/26 financial year.
The UK Government has moved the child maintenance deduction higher up the regulated priority order, reports the Daily Record.
This would ensure that when the Fair Repayment Rate is implemented, it would not reduce the current number of child maintenance deductions being made from a Universal Credit award.
This regulatory adjustment will be temporarily in place for a year as the DWP seeks to gather more evidence on the impact of the child maintenance deduction change on Universal Credit households, particularly its ability to address other debts.
The gathered evidence will decide whether this temporary change should become permanent or if a different approach is needed.
Universal Credit and other DWP-related benefits saw a 1.7 per cent increase on April 7. As most benefits are paid in arrears, claimants will not see the full uprating until the next assessment period has been completed.
Universal Credit (monthly rates) 2025/26
Single claimant
- Under 25: £316.98 (from £311.63)
- 25 or over: £400.14 (from £393.45)
Couples
- Joint claimants both under 25: £497.55 (from £489.23)
- Joint claimants, one or both 25 or over: £628.10 (from £617.60)
