The Department for Work and Pensions (DWP) is reducing Universal Credit payments for claimants born in certain years, with younger recipients receiving up to £138 less per month than older claimants. Personal finance experts have warned that this creates an unfair 'penalty' based on age.
Age-Based Payment Disparities
Under current DWP rates, single claimants under 25 receive £338.58 per month, while those aged 25 and over get £424.90—a difference of £86.32. For couples where both partners are under 25, the household payment is £528.34, compared to £666.97 for couples where at least one partner is 25 or older, resulting in a gap of £138.63.
Charis Chittick, from One Parent Families Scotland, described this as a 'young parent penalty,' noting that under-25s are paid a lower rate of Universal Credit than over-25s. She argued that the costs of raising a child are the same regardless of the parent's age, and called for policy change to protect children and families.
Government Response
A DWP spokesperson defended the system, stating that Universal Credit includes separate elements to support eligible customers with housing, children, and childcare costs. They added that working families can claim up to 85% of eligible childcare costs each month. The spokesperson also highlighted the government's Child Poverty Strategy, which aims to lift 550,000 children out of poverty by 2030, and efforts to rebalance Universal Credit to address perverse incentives that discourage work.
