Fair Repayment Rate – reduction of the Universal Credit overall deductions cap from 25% to 15% and moving the child maintenance deduction higher up the regulated priority order
The Chancellor announced the Fair Repayment rate at the Autumn Budget on the 30 October 2024. This measure is a permanent change and will reduce the Universal Credit (UC) overall deductions cap from 25% to 15% of a customer’s UC standard allowance from 30 April 2025. The measure will help approximately 1.2 million UC households with deductions retain more of their UC award, on average £420 a year or £35 per month.
The Government believes that all parents have an obligation to support their children and recognises the overall impact child support maintenance has in moving children out of poverty. Therefore, in support of this, a commitment was made to move the child maintenance (CM) deduction higher up the regulated priority order. This would help to ensure that when the FRR is implemented, it would not reduce the current number of CM deductions being made from a UC award.
In support of the commitment set out above the Department deemed it necessary to implement a further protection to ensure that the CM deduction can be made even if this would result in the overall deductions cap of 15% being exceeded.
These CM payments provide vital financial support, and this regulatory change coupled with the policy decision to exceed the new overall deductions cap of 15%, where applicable, will continue to enable the CM payment to be made when other payment methods have failed or are not viable.
This regulatory change will be temporarily in place for one year as the Department wants to gather further evidence as to the impact the CM deduction change has on UC households, making a CM deduction, with regards to its ability to address other debts. The evidence will determine whether the temporary change should be made permanent or if an alternative approach is required.
I am a woman, aged 60, living in Scotland, whose pension has all been spent just on living expenses. My GP has signed me off as being unable to work, due to having type 2 diabetes, fluid retention, severe anxiety, depression and panic attacks, and I also have numerous other ongoing age related issues, which make it impossible for me to work.
This means my only income is Universal Credit at the rate of £157 every 2 weeks, which means I only have about £75 per week as my only income.
Does the Scottish government have any plans to move Universal Credit over to Scotland, either now or in the foreseeable future?
Please acknowledge receipt of this email and I look forward to hearing from you.
Regards
Nicola Kirton
Hi Nicola. Universal Credit is administered by the DWP so it is very unlikely it will move to Social Security Scotland. I would advise to get a full benefit check, also due to your health issues Adult Disability Payments. Where in Scotland are you? regards