The Social Security (Income and Capital Disregards) (Amendment) (No. 2) Regulations 2025
These regulations, effective July 22, 2025, amend several UK social security regulations to exclude miscarriage of justice compensation payments from income and capital assessments when determining benefit eligibility.
This affects Income Support, Jobseeker's Allowance, State Pension Credit, Housing Benefit, Employment and Support Allowance, and Universal Credit.
The changes ensure that compensation received for wrongful conviction does not reduce a recipient's entitlement to other benefits.
The regulations were developed with consultation from relevant organizations and the Social Security Advisory Committee, following the legal powers and provisions outlined in various acts.
Arguments For
Intended Benefit: Provides financial support to individuals wrongly convicted of crimes by excluding miscarriage of justice compensation payments from benefit calculations. This ensures that compensation does not reduce their existing benefits and helps them rebuild their lives.
Evidence Cited: The regulations cite several existing social security and welfare acts as the legal basis for the amendments. The explanatory note mentions three miscarriage of justice schemes as context for the changes.
Implementation Methods: The regulations amend specific sections within existing social security regulations related to income and capital disregards, adding a specific disregard for miscarriage of justice compensation payments.
Legal/Historical Basis: The amendments are supported by various sections of the Social Security Contributions and Benefits Act 1992, Jobseekers Act 1995, State Pension Credit Act 2002, Welfare Reform Act 2007, and Welfare Reform Act 2012, and are made in accordance with the Social Security Administration Act 1992.
Arguments Against
Potential Impacts: Adding a new disregard for compensation could increase the overall cost of benefit programs.
Implementation Challenges: Amendments across several complex pieces of legislation could lead to technical errors in interpretation or implementation by benefit agencies.
Alternative Approaches: The government could have explored alternative methods of supporting individuals, such as providing a separate, targeted compensation payment alongside existing benefits.
Unintended Effects: The change could create inconsistencies or loopholes in the system’s overall approach to income and capital disregards. Some might argue this creates inequality compared to other sources of compensation.
- Citation, commencement and extent (1) These Regulations may be cited as the Social Security (Income and Capital Disregards) (Amendment) (No. 2) Regulations 2025 and come into force on 22nd July 2025. (2) These Regulations extend to England and Wales and Scotland.
This section establishes the title of the regulations as the "Social Security (Income and Capital Disregards) (Amendment) (No. 2) Regulations 2025", and they become effective on July 22, 2025.
The regulations' geographical scope covers England, Wales, and Scotland.
- Amendment of the Income Support (General) Regulations 1987 (1) The Income Support (General) Regulations 1987 are amended as follows. (2) In regulation 2(1) (interpretation)— (a) after the definition of “MFET Limited” insert— ““miscarriage of justice compensation payment” means— (a) a payment made under section 133(1) of the Criminal Justice Act 1988; or (b) any other payment made by the Secretary of State, the Scottish Ministers or, in Northern Ireland, the Department of Justice, for the purpose of compensating a person— (i) for a miscarriage of justice in criminal proceedings, or (ii) for being wrongfully charged with a criminal offence;”; (b) in the definition of “qualifying person” for “or an LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”. (3) In regulation 42(4ZB) (notional income) after sub-paragraph (e) insert—(f) a miscarriage of justice compensation payment. (4) In regulation 48(10) (income treated as capital) after sub-paragraph (af) insert—(ag) which is a miscarriage of justice compensation payment;. (5) In regulation 51(3B) (notional capital) after sub-paragraph (f) insert—(g) a miscarriage of justice compensation payment. (6) In Schedule 3 (housing costs), in paragraph 18(8)(b), for “or LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or miscarriage of justice compensation payment”. (7) In Schedule 9 (sums to be disregarded in the calculation of income other than earnings), in paragraph 39— (a) in sub-paragraph (1A) after paragraph (e) insert—(f) miscarriage of justice compensation payment;. (b) in each of sub-paragraphs (2) to (6) for “or an LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”. (8) In Schedule 10 (capital to be disregarded), in paragraph 22— (a) in sub-paragraph (1A) for “or LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”; (b) in each of sub-paragraphs (2) to (5) and (6) for “or an LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”.
This section modifies the 1987 Income Support (General) Regulations.
Specific clauses within the regulations (relating to interpretation, notional income, income treated as capital, notional capital, housing costs, and disregarded income and capital) are amended to include "miscarriage of justice compensation payment" as a disregarded amount in benefit calculations.
This ensures that such payments do not impact the calculation of income support benefits.
- Amendment of the Jobseeker’s Allowance Regulations 1996 (1) The Jobseeker’s Allowance Regulations 1996 are amended as follows. (2) In regulation 1(3) (citation, commencement, interpretation and application)— (a) after the definition of “MFET Limited” insert— ““miscarriage of justice compensation payment” means— (a) a payment made under section 133(1) of the Criminal Justice Act 1988; or (b) any other payment made by the Secretary of State, the Scottish Ministers or, in Northern Ireland, the Department of Justice, for the purpose of compensating a person— (i) for a miscarriage of justice in criminal proceedings, or (ii) for being wrongfully charged with a criminal offence;”; (b) in the definition of “qualifying person” for “or an LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”. (3) In regulation 105(10A) (notional income) after sub-paragraph (af) insert—(ag) which is a miscarriage of justice compensation payment;. (4) In regulation 110(10) (income treated as capital) after sub-paragraph (af) insert—(ag) which is a miscarriage of justice compensation payment;. (5) In regulation 113(3B) (notional capital) after sub-paragraph (f) insert—(g) a miscarriage of justice compensation payment. (6) In Schedule 2 (housing costs), in paragraph 17(8)(b), for “or LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”. (7) In Schedule 7 (sums to be disregarded in the calculation of income other than earnings), in paragraph 41— (a) in sub-paragraph (1A), after paragraph (e) insert—(f) miscarriage of justice compensation payment;. (b) in each of sub-paragraphs (2) to (6) for “or an LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”. (8) In Schedule 8 (capital to be disregarded), in paragraph 27— (a) in sub-paragraph (1A) for “or LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”; (b) in each of sub-paragraphs (2) to (5) and (6) for “or an LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”.
Similar to section 2, this section amends the 1996 Jobseeker's Allowance Regulations.
It makes several changes to the regulations to incorporate the new disregard for miscarriage of justice compensation payments in the calculation of Jobseeker's Allowance.
The amendments work in the same way to the Income Support regulations defined above across the different sections of the act.
- Amendment of the State Pension Credit Regulations 2002 (1) The State Pension Credit Regulations 2002 are amended as follows. (2) In regulation 1(2) (citation, commencement and interpretation)— (a) move the definition of “LGBT Financial Recognition Scheme payment” so that it appears after the definition of “the Jobseeker’s Allowance Regulations”; (b) after the definition of “MFET Limited” insert— ““miscarriage of justice compensation payment” means— (a) a payment made under section 133(1) of the Criminal Justice Act 1988; or (b) any other payment made by the Secretary of State, the Scottish Ministers or, in Northern Ireland, the Department of Justice, for the purpose of compensating a person— (i) for a miscarriage of justice in criminal proceedings, or (ii) for being wrongfully charged with a criminal offence;”; (c) in the definition of “qualifying person” for “or an LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”. (3) In Schedule 2 (housing costs), in paragraph 14(8), after paragraph (be) insert—(bf) any miscarriage of justice compensation payment;. (4) In Schedule 5 (income from capital), in paragraph 15— (a) in sub-paragraph (1A) for “or LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”; (b) in each of sub-paragraphs (2) to (5) and (6) for “or an LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”.
This part updates the 2002 State Pension Credit Regulations.
It modifies definitions, and various sections related to disregarded income and capital, similar to those found in sections 2 and 3.
The aim is to integrate the new disregard for miscarriage of justice compensation payments into State Pension Credit calculations.
- Amendment of the Housing Benefit Regulations 2006 (1) The Housing Benefit Regulations 2006 are amended as follows. (2) In regulation 2(1) (interpretation)— (a) after the definition of “MFET Limited” insert— ““miscarriage of justice compensation payment” means— (a) a payment made under section 133(1) of the Criminal Justice Act 1988; or (b) any other payment made by the Secretary of State, the Scottish Ministers or, in Northern Ireland, the Department of Justice, for the purpose of compensating a person— (i) for a miscarriage of justice in criminal proceedings, or (ii) for being wrongfully charged with a criminal offence;”; (b) in the definition of “qualifying person” for “or an LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”. (3) In regulation 42(7A) (notional income) after sub-paragraph (e) insert—(f) a miscarriage of justice compensation payment. (4) In regulation 46(6) (income treated as capital) after “an LGBT Financial Recognition Scheme payment” insert “a miscarriage of justice compensation payment”. (5) In regulation 49(4A) (notional capital) after sub-paragraph (f) insert—(g) a miscarriage of justice compensation payment. (6) In regulation 74(9) (non-dependant deductions) after sub-paragraph (be) insert—(bf) any miscarriage of justice compensation payment;. (7) In Schedule 5 (sums to be disregarded in the calculation of income other than earnings), in paragraph 35— (a) in sub-paragraph (1A) after paragraph (e) insert—(f) miscarriage of justice compensation payment;. (b) in each of sub-paragraphs (2) to (6) for “or an LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”. (8) In Schedule 6 (capital to be disregarded), in paragraph 24— (a) in sub-paragraph (1A) for “or LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”; (b) in each of sub-paragraphs (2) to (5) and (6) for “or an LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”.
This section adjusts the 2006 Housing Benefit Regulations to exclude miscarriage of justice compensation from calculations.
As with previous sections, relevant parts of the regulations, including those detailing definitions, notional income, income treated as capital, notional capital, non-dependant deductions, and disregarded income/capital, are updated to reflect this change.
- Amendment of the Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006 (1) The Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006 are amended as follows. (2) In regulation 2(1) (interpretation)— (a) after the definition of “MFET Limited” insert— ““miscarriage of justice compensation payment” means— (a) a payment made under section 133(1) of the Criminal Justice Act 1988; or (b) any other payment made by the Secretary of State, the Scottish Ministers or, in Northern Ireland, the Department of Justice, for the purpose of compensating a person— (i) for a miscarriage of justice in criminal proceedings, or (ii) for being wrongfully charged with a criminal offence;”; (b) in the definition of “qualifying person” for “or an LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”. (3) In regulation 55(10) (non-dependant deductions) after sub-paragraph (be) insert—(bf) any miscarriage of justice compensation payment;. (4) In Schedule 6 (capital to be disregarded), in paragraph 16— (a) in sub-paragraph (1A) for “or LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”; (b) in each of sub-paragraphs (2) to (5) and (6) for “or an LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”.
This section alters the 2006 Housing Benefit Regulations (for those of state pension credit age).
The structure of the changes mirrors previous sections, incorporating the new disregard for miscarriage of justice compensation into relevant parts of the regulations regarding definitions, non-dependant deductions, and disregarded capital.
- Amendment of the Employment and Support Allowance Regulations 2008 (1) The Employment and Support Allowance Regulations 2008 are amended as follows. (2) In regulation 2(1) (interpretation)— (a) after the definition of “MFET Limited” insert— ““miscarriage of justice compensation payment” means— (a) a payment made under section 133(1) of the Criminal Justice Act 1988; or (b) any other payment made by the Secretary of State, the Scottish Ministers or, in Northern Ireland, the Department of Justice, for the purpose of compensating a person— (i) for a miscarriage of justice in criminal proceedings, or (ii) for being wrongfully charged with a criminal offence;”; (b) in the definition of “qualifying person” for “or an LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”. (3) In regulation 107(5A) (notional income – income due to be paid or income paid to or in respect of a third party) after sub-paragraph (e) insert—(f) a miscarriage of justice compensation payment. (4) In regulation 112(8)(b) (income treated as capital) after paragraph (v) insert—(vi) miscarriage of justice compensation payment. (5) In regulation 115(5A) (notional capital) after sub-paragraph (f) insert—(g) a miscarriage of justice compensation payment. (6) In Schedule 6 (housing costs), in paragraph 19(8)(b), for “or LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”. (7) In Schedule 8 (sums to be disregarded in the calculation of income other than earnings), in paragraph 41— (a) in sub-paragraph (1A), after paragraph (e) insert—(f) miscarriage of justice compensation payment;. (b) in each of sub-paragraphs (2) to (6) for “or an LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”. (8) In Schedule 9 (capital to be disregarded), in paragraph 27— (a) in sub-paragraph (1A) for “or LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”; (b) in each of sub-paragraphs (2) to (5) and (6) for “or an LGBT Financial Recognition Scheme payment” substitute “an LGBT Financial Recognition Scheme payment or a miscarriage of justice compensation payment”.
The 2008 Employment and Support Allowance Regulations are amended here to incorporate the new miscarriage of justice compensation disregard.
Amendments, following the same pattern as in previous sections, are made to definitions, notional income, income treated as capital, notional capital, housing costs, and disregarded income and capital clauses within the regulations.
- Amendment of the Universal Credit Regulations 2013 (1) The Universal Credit Regulations 2013 are amended as follows. (2) In regulation 76 (special schemes for compensation etc.)— (a) after paragraph (1C) insert—(1D) This regulation also applies where a person— (a) receives a miscarriage of justice compensation payment or is a person for whose benefit such a payment is made; (b) is the partner of a person to whom sub-paragraph (a) refers, and receives a payment by or on behalf of that person which is derived from the miscarriage of justice compensation payment; (c) was the partner of a person to whom sub-paragraph (a) refers immediately before their death and receives a payment from their estate which is derived from a miscarriage of justice compensation payment; (d) in a case where a miscarriage of justice compensation payment is made to the personal representative of a deceased person (“P”), was P’s partner immediately before P’s death and receives a payment from P’s estate which is derived from the miscarriage of justice compensation payment;. (b) in paragraph (4) after the definition of “the Horizon system” insert— ““miscarriage of justice compensation payment” means— (a) a payment made under section 133(1) of the Criminal Justice Act 1988; or (b) any other payment made by the Secretary of State, the Scottish Ministers or, in Northern Ireland, the Department of Justice, for the purpose of compensating a person— (i) for a miscarriage of justice in criminal proceedings, or (ii) for being wrongfully charged with a criminal offence;”.
Finally, the 2013 Universal Credit Regulations are altered to include the new miscarriage of justice compensation disregard.
This section focuses on amending regulation 76 concerning special compensation schemes.
Specific clauses are modified to ensure that compensation payments, and payments derived from them for partners and estates, are disregarded in Universal Credit calculations.
Related
The Air Navigation (Restriction of Flying) (Dinas Powys, Wales) (Emergency) Regulations 2026
Regulations immediately restricted unmanned aircraft below 1,400 feet over a specified area in Dinas Powys, Wales, due to an emergency.
Read MoreThe Universal Credit, Personal Independence Payment and Employment and Support Allowance (Amendment) Regulations 2026
The regulations amended provisions within the Universal Credit, Personal Independence Payment, and Employment and Support Allowance frameworks to exclude work and voluntary activities from being considered reasons for fresh benefit determinations or reassessments.
Read MoreThe Tribunal Procedure (First-tier Tribunal) (Property Chamber) (Amendment) Rules 2026
The Rules amended the 2013 Tribunal Procedure for the Property Chamber to incorporate jurisdiction under the Renters' Rights Act 2025 and adjusted provisions related to costs orders for Housing Act 1988 financial penalty appeals.
Read MoreCorrection Slip
A correction notice was issued for The Mental Health Act 2025 (Commencement No. 1) Regulations 2026, amending a referencing error in a footnote.
Read More