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Major Changes to DWP and HMRC Benefits Set for January 2025

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As the new year approaches, significant changes to benefits and financial support from the Department for Work and Pensions (DWP) and HM Revenue and Customs (HMRC) are set to take effect in January 2025. These adjustments will impact millions of individuals across the UK, particularly those reliant on state support.

Key Takeaways

  • Changes to Attendance Allowance and State Pension payments.

  • New £200 payment scheme to assist with living costs.

  • Adjustments to payment dates due to bank holidays.

  • Discontinuation of certain mobility support payments.

Overview of Changes

Several changes will be implemented starting January 2025, coinciding with the latest Consumer Price Index inflation rate of 2.6% recorded in November 2024. This increase is primarily due to rising petrol and second-hand car costs. The Bank of England has maintained interest rates at 4.75%, with inflation expected to rise to 2.8% by mid-2025.

Attendance Allowance Transition

From January, individuals receiving Attendance Allowance in Scotland will be automatically transitioned to a new benefit called the Pension Age Disability Payment. This payment is designed for those of State Pension age who require assistance due to disability or long-term health conditions. The payment will be available at two rates:

  • Lower Rate: £72.65 per week for those needing help during the day or night.

  • Higher Rate: £108.55 per week for those requiring round-the-clock support.

Payment Date Adjustments

Due to the New Year bank holidays, several benefits will see changes in their payment dates:

  • January 1: Payments due on New Year's Day will be made on December 31 instead. This includes State Pension, Universal Credit, and other DWP benefits.

  • January 2: In Scotland, payments due on this day will also be advanced to December 31.

  • January 3: Changes to Personal Independence Payment (PIP) and Disability Living Allowance (DLA) payments will occur, including the end of the New Vehicle Payment.

Discontinuation of Mobility Support Payments

The New Vehicle Payment, which provided £750 to assist individuals on PIP or other disability benefits using the Motability scheme, will be discontinued. Additionally, the £100 New Product Payment for those leasing scooters and powered wheelchairs will also end. These payments were introduced to help offset the rising costs of new vehicles.

Cold Weather Payments

With forecasts predicting snow in early January, Cold Weather Payments of £25 may be triggered for eligible households. These payments are issued when temperatures drop to zero degrees Celsius or below for seven consecutive days. Approximately 4.1 million individuals in England and Wales may qualify for this support.

New £200 Cost of Living Payment

Starting January 22, a new £200 payment will be available to assist households with living costs. This initiative is part of the DWP's Household Support Fund, aimed at helping with essential expenses such as energy bills, food, and clothing. Local councils will provide further details on how to apply for this support.

Winter Fuel Payment Deadline

The deadline for receiving the Winter Fuel Payment is January 29. Individuals who have not received confirmation or payment by this date should contact the relevant authorities to check their eligibility. Approximately 1.5 million people are expected to benefit from this payment this year.

Tax Self-Assessment Deadline

Finally, the deadline for filing tax returns for the 2023-2024 tax year is January 31, 2025. Taxpayers unable to pay their bills in full can apply for HMRC's Time to Pay system, allowing them to spread payments over 12 months. This system is designed to help individuals manage their financial commitments effectively.

Sources

  • DWP and HMRC benefits and money changes affecting millions coming in January 2025 - Cambridgeshire Live, Cambridge News.

  • Full list of DWP and HMRC benefit payment and money changes in January 2025 - Birmingham Live, Birmingham Live.

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