The monthly round-up of news, guidance, legislation, and case law from Shelter's Specialist Debt Advice Service.
News and legal updates
This month's legal round up includes DRO guidance on the removal of the two-child limit, guidance on motor finance redress received during insolvency, and new legislation recognising cryptocurrency as personal property.
DROs and the removal of the two-child limit in Universal Credit
The government announced the removal of the two-child limit on Universal Credit from April 2026. Child Poverty Action Group (CPAG) states that it will lift 350,000 children out of poverty and mean 700,000 children are in less deep poverty.
We asked the DRO Team - what is the position for clients part way through their DRO moratorium period? For example, would the DRO Team disregard the removal of the two-child limit and subsequent increase in income for additional children?
The DRO Team replied as follows:
Child benefit is classed as income and any related expenditure for the child should be scheduled in the DRO application.
Individuals should report change in their circumstances- we will confirm if updated I&E is needed.
Please support individuals to complete updated I&E and provide this to us as required.
Each case will be treated on a case-by-case basis.
Please do let us know if you have cases where clients’ DROs are revoked due to the lifting of the cap.
CPAG position on the two-child limit
Motor vehicle finance redress and insolvency
The Insolvency Service has published updated guidance on how redress paid during insolvency is viewed. In summary, redress paid is an asset. The guidance covers the position for:
creditors
bankrupts and former bankrupts
individuals in Debt Relief Orders / Individual Voluntary Arrangements
The guidance may be subject to change following the outcome of the FCA’s consultation on its redress scheme.
CP25/27: Motor finance consumer redress scheme
Cryptocurrency recognised as personal property
The Ministry of Justice (MoJ) has published a press release confirming that new legislation has come into force that recognises cryptocurrency as personal property.
Megan Lloyd has written a very useful article on Medium discussing the potential impact of cryptocurrency on a client’s debt and insolvency options.
Property (Digital Assets etc) Act 2025
Medium ‘Cryptocurrency and Insolvency’, Megan Lloyd (March 2025)
Spotlight
This month's article from Shelter's Specialist Debt Advice Service.
Council tax second home premiums
A local authority can charge a higher rate of council tax on long term empty properties and second homes. Our new Shelter Legal page explains which dwellings may be subject to a premium, the level of premiums that a local authority can charge and when a premium cannot be applied.
Read about Council tax second home premiums on Shelter Legal.