Starting July 22, 2025, the Department for Work and Pensions (DWP) is implementing a significant change that could benefit individuals who previously received payments under the miscarriage of justice compensation scheme.
These payments will no longer be considered capital or income when determining eligibility for means-tested benefits in Great Britain and Northern Ireland.
What Was the Previous Rule?
Until now, compensation awarded through the miscarriage of justice scheme was treated as capital for calculating benefits such as:
- Universal Credit
- Pension Credit
- Income-based Jobseeker’s Allowance
- Housing Benefit
- Income Support
- Income-related Employment and Support Allowance
Because these benefits are means-tested, individuals with a higher amount of income or capital—such as compensation payments—were often disqualified from receiving financial support.
New Rules Effective July 22, 2025
Under the new policy, the DWP has clarified that compensation for miscarriages of justice will no longer count as income or capital. This shift allows:
- Current claimants to retain their benefits even if they have received such compensation.
- Previously ineligible individuals to now qualify for benefits, as their compensation will not impact the means test.
This policy applies uniformly across England, Scotland, Wales, and Northern Ireland.
Who Qualifies for Miscarriage of Justice Compensation?
You may be eligible for compensation from the UK Government or Devolved Governments if:
- Your criminal conviction has been overturned, and
- New evidence proves beyond a reasonable doubt that a miscarriage of justice occurred.
Who Is Affected by This Update?
This policy change could impact those who:
- Are currently receiving means-tested benefits.
- Were previously denied benefits due to excess income or capital from compensation.
What Should You Do Now?
If You Already Claim Means-Tested Benefits
You must report a change in circumstances to the DWP, specifying that:
- You have received miscarriage of justice compensation.
- This compensation is no longer classified as capital.
You’ll also need to submit proof of your compensation award. Your existing benefits will not be affected, but the DWP needs this information to properly update your file.
If You Don’t Currently Receive Benefits
The DWP encourages individuals in this category to check their eligibility for:
- Universal Credit
- Pension Credit
- Housing Benefit
If you qualify, be ready to provide documentation of your compensation payment when applying.
Information Summary Table
| Category | Previous Rule | New Rule (from July 22, 2025) |
|---|---|---|
| Treatment of Compensation | Counted as income/capital | No longer counted as income/capital |
| Impact on Means-Tested Benefits | Often led to disqualification | May now become eligible |
| Affected Individuals | Current & potential benefit claimants | Must report changes or reapply |
| Areas Covered | Great Britain & Northern Ireland | Applies nationwide |
This landmark change by the DWP is set to correct a long-standing issue that affected many innocent individuals wrongly convicted of crimes. With compensation payments no longer reducing benefit eligibility, thousands stand to gain much-needed financial support.
It is crucial for both existing and potential claimants to take immediate action—either by reporting the change or applying for benefits from July 22, 2025.
FAQs
What documents do I need to submit to the DWP regarding my compensation?
You’ll need to provide a copy of your miscarriage of justice compensation award when reporting changes or applying for benefits.
Will my current benefits be reduced due to this change?
No, your current means-tested benefits will remain unaffected, but you must report the change to the DWP.
Can this change apply retroactively to past denied benefit applications?
While not retroactive, individuals who were previously denied benefits can reapply under the new rules starting July 22, 2025.