Universal Credit update could make thousands more eligible for payments

The LGBT Financial Recognition Scheme won’t impact a person’s eligibility for Universal Credit. It has been added to the list of special compensation schemes and any payments from it won’t be counted towards Universal Credit but must still be noted to the DWP.

While the exact number of people that could claim this financial recognition hasn't been announced, government estimates indicate it is under 4,000 personnel according to Sky News. The scheme was launched late last year providing certain veterans with up to £70,000. This is to "acknowledge historic wrongs” as a response to Lord Etherton’s Review on LGBT veterans.

Usually, if a person has more than £16,000 in money, savings and investments, also known as capital, they would not qualify for Universal Credit. But now the LGBT Financial Recognition Scheme has been added to the list of special schemes that are not counted towards this sum.

Other compensation schemes on the list include victims of the Grenfell Tower fire in 2017, the 2005 London Bombings and Victoria Cross or George Cross recipients. Although these aren’t counted towards capital for Universal Credit, recipients will still need to let the DWP know details about these payments, reports The Mirror.

The LGBT Financial Recognition Scheme was officially launched in December, awarding an initial £50,000 for LGBT veterans who were dismissed or discharged due to their sexual orientation or gender identity. An additional payment between £1,000 and £20,000 is available to veterans and Service Personnel depending on how negatively affected they were by the ban on LGBT personnel from 1967 to 2000.

To be eligible for the financial recognition payment, applicants must have served in HM Armed Forces between 27 July 1967 and 11 January 2000, during the ban on LGBT personnel serving in HM Armed Forces. They must also have been affected by this ban.

People who believe they may be eligible for financial recognition can find out more about the scheme on Gov.uk. They can apply either using the LGBT Financial Recognition Scheme App or an official LGBT Financial Recognition Scheme hard copy application form.

The window to apply opened on December 13, 2024 and will close on December 12, 2026. Alongside being exempt from Universal Credit calculations, the payments are also exempt from income tax and other means-tested benefits.

Other non-financial measures to address these historic wrongs are also in the works. This includes LGBT veterans who were dismissed or discharged due to their actual or perceived sexual orientation or gender identity can apply to have their rank restored and their discharge amended.