Starting 22 July 2025, a significant rule change from the Department for Work and Pensions (DWP) will make it easier for people who have received compensation for a miscarriage of justice to qualify for means-tested benefits, including Universal Credit, Housing Benefit, Pension Credit, and others.

Previously, these compensation awards were counted as income or capital when assessing eligibility for certain benefits. This meant some people were denied support simply because of the compensation they received for an injustice. However, from 22 July, this money will no longer affect benefit calculations across Great Britain and Northern Ireland.

What’s Changing?

The UK Government and Devolved Governments’ Miscarriage of Justice Compensation Schemes offer financial redress when someone’s conviction is overturned due to new evidence proving they were wrongly convicted.

Up until now, receiving this compensation could negatively impact a person’s eligibility for key benefits, as it was counted toward the capital limits for means-tested support. From 22 July 2025 onwards, this money will no longer count as either capital or income when determining entitlement to:

• Universal Credit

• Housing Benefit

• Pension Credit

• Income-based Jobseeker’s Allowance

• Income-related Employment and Support Allowance (ESA)

• Income Support

What Should You Do Next?

If You Already Claim Means-Tested Benefits:

You should report a change of circumstances to the DWP. Let them know you have previously received a miscarriage of justice compensation payment. This could result in your benefits being increased because this compensation will no longer be factored into your entitlement.

👉 You’ll need to provide a copy of your compensation award notification as evidence.

If You Don’t Currently Claim Means-Tested Benefits:

You may now become eligible for support even if you were previously rejected due to having too much capital or income. Consider making a new claim after 22 July 2025 and provide evidence of your compensation when applying.

Why This Matters

This update corrects a long-standing unfairness where people wrongly convicted of crimes were further penalized by having their compensation count against them when seeking help. The change ensures that compensation serves its intended purpose—supporting the wrongfully convicted—without limiting their access to benefits meant for those in need.

Additional Tip: Review Your Other Benefits

This change may also open doors to other forms of financial support if you now fall below income and capital thresholds:

• Council Tax Reduction

• Free NHS prescriptions or dental care

• Help with energy costs or water bills