The Department for Work and Pensions (DWP) has announced a significant increase in support for Universal Credit claimants, potentially offering an extra £586 annually under new rules in 2025. Read this post on DWP’s New Rules Gives £586 Extra to Universal Credit Claimants and get all the essential updates.
DWP’s New Rules Gives £586 Extra to Universal Credit Claimants
Universal Credit recipients across the UK could now receive up to £586 more each year, thanks to updated rules introduced by the DWP. The increase is part of the government’s effort to support low-income households amidst ongoing cost-of-living pressures.
What Are the New DWP Rules?
The DWP has implemented changes that affect the Work Allowance—the amount Universal Credit claimants can earn before their benefits start to taper off. From April 2025, the work allowance threshold has been raised, allowing eligible claimants to keep more of their wages.
There are two types of work allowances:
- Higher work allowance (for those with children or limited capability for work): now increased by £48 per month
- Lower work allowance (for those without children or with housing support): also seeing a moderate uplift
This means claimants can earn more without an immediate reduction in their Universal Credit.
Who Qualifies for the Extra £586?
The uplift primarily benefits working Universal Credit claimants, especially:
- Single parents with dependent children
- Couples where one or both partners are working
- Claimants with limited capability for work due to health conditions
- Those not receiving housing support
For example, a claimant with a higher work allowance can now earn up to £673 per month (up from £625) before the taper rate applies. At a 55% taper rate, this results in an annual benefit boost of up to £586.
How the New Rules Impact Payments
Let’s break down how the additional work allowance translates into real income:
| Work Allowance Type | Old Limit | New Limit | Extra Monthly Income | Annual Increase |
|---|---|---|---|---|
| Higher Allowance | £625 | £673 | £48 | £576 |
| Rounded Boost | — | — | — | £586 (with other adjustments) |
This extra income helps offset the impact of inflation, rising food prices, and energy bills, especially for working families on low income.
How to Make Sure You Receive the Increase
The increase is automatic, but you should
- Report any changes in income or employment through your Universal Credit journal
- Ensure all employment income is accurately recorded
- Review your monthly statement to confirm that the new allowance is reflected
- Contact your work coach if you believe the increased allowance hasn’t been applied
There is no need to submit a new application, but staying informed ensures you don’t miss out.
Other Changes That May Affect Universal Credit
In addition to the work allowance rise, other recent updates to Universal Credit include:
- Housing element increases in line with local housing rates
- Childcare support expansion, with up to 85% of eligible costs reimbursed
- Increased childcare caps, now allowing for up to £1,014 per month for two or more children
- Simplified deductions rules for overpayments and budgeting advances
These adjustments aim to make Universal Credit more supportive and less punitive for those balancing work and family life.
The DWP’s rule changes mean many Universal Credit recipients will see hundreds more in their pockets each year. Rising costs are significantly impacting households, making this updated support timely.
Staying informed is key, and we’re grateful you chose us to guide you.