
Serious criminals receiving as much as £800 a month in benefits could soon lose their entitlement under Labour proposals to close a loophole in welfare rules.

Under current rules, an offender sentenced to a hospital order is able to be paid a full award for universal credit, despite someone in prison on the same sentence being banned from claiming most benefits.

The government has pledged to crackdown on this “loophole,” ensuring that both groups of criminals are subject to the same rules.

Prime minister Keir Starmer said: “It cannot be right that offenders convicted of the most serious crimes continue to receive benefits they don’t need at the expense of the taxpayer.

“I’m determined to do whatever it takes to stand up for victims, protect taxpayers, and ensure support goes to those who genuinely need it.”

The loophole was previously raised by families of victims of the 2023 Nottingham attacks – Grace O'Malley-Kumar, Barnaby Webber, and Ian Coates – who had called for it to be addressed.

Work and pensions secretary Pat McFadden said: “I don't think there's a single household in Britain who believes it's right that convicted criminals receive thousands of pounds a year in benefits.

“It's unfair to victims' families and to taxpayers whose hard-earned cash ends up in the pockets of offenders, and contrary to our values – we don't reward acts of violence.

“That’s why I’m acting to right the wrongs within our benefits system, so it supports people who genuinely need it, while delivering fairness to the taxpayer.”

Dr Sanjoy Kumar and Dr Sinead O’Malley, parents of Grace O’Malley-Kumar said:"We are delighted to hear this announcement from the Secretary of State.

“For us, the campaigning families this is what decisive and bold departmental leadership looks like. Pat's actions benefit our country and our communities. As a result, our country now leads many countries across Europe on this issue.”

Linda and Leon Westcarr, the mother and uncle of Kennedi Westcarr-Sabaroche, who was murdered by her partner in 2024, said: “We welcome this long-overdue reform to the benefits system, which corrects a clear injustice that has caused real harm for too long.”

The Department for Work and Pensions (DWP) says it will engage with victims' groups and mental health experts on the proposals. Offenders would continue to receive free care and mental health support from the NHS following any change.

No official estimates of how many offenders will be affected or savings to the government have been made. An offender on universal credit and its higher health element, living in a single household and over the age of 25, could currently receive around £823 per month.

Julian Hendy from the Hundred Families charity, which supports families after mental health related killings said: “This is very welcome news. We have long argued that paying welfare benefits to people who have committed serious violent crimes is wrong and cannot be justified. They’re offenders sentenced to hospital orders who have no costs or need for such payments.”

Criminals in hospital to lose benefits as Labour closes ‘loophole’