Victims who have suffered from miscarriages of justice will now not see their benefits, including Universal Credit, affected by any compensation they receive. Currently, individuals who receive compensation after a criminal conviction may become ineligible for certain means-tested benefits based on their income and savings.
For instance, eligibility for Universal Credit is restricted if savings or investments exceed £16,000. However, the previous rule including compensation payments as part of one’s capital has been eliminated. This change impacts 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 amount under the Miscarriage of Justice Compensation Scheme from £1 million to £1.3 million. Sir Stephen Timms MP, minister for social security and disability, emphasized the importance of rebuilding trust with those let down by the system, stating that while the lost years cannot be recovered, victims must be given the chance to restart their lives.
Alex Davies-Jones, minister for victims and violence against women and girls, highlighted the profound impact of miscarriages of justice on individuals’ lives and the significance of improved benefit support and the compensation cap increase in providing deserved recognition and financial redress.
Under Universal Credit rules, if a claimant has over £6,000 in savings and investments, their benefit is reduced by £4.35 for every £250 above this threshold. The deduction applies even if the saved amount is not an exact multiple of £250. For example, savings of £6,300 would lead to a deduction of £8.70, with £4.35 deducted for the first £250 and another £4.35 for the remaining £50.
Individuals normally become ineligible for Universal Credit if their savings exceed £16,000. In cases where individuals receiving Tax Credits are transitioning to Universal Credit, they may still qualify for Universal Credit for up to a year if their savings surpass £16,000.