Serious criminals detained in psychiatric hospitals across London could lose up to £800 a month in benefits under new Government rules.

Killers, sex offenders and other violent criminals receiving NHS psychiatric treatment will no longer be able to claim Universal Credit for living costs already covered by the taxpayer.

The crackdown follows years of campaigning by victims' families, who have called for an end to the so-called "double provision" loophole.

The changes, which will apply nationwide, are expected to affect around 2,500 offenders already detained in hospital and save taxpayers tens of millions of pounds a year.

The move comes as part of the government’s plan to “put fairness back of the heart of the welfare system”, with the new regulations due to come into force early next year following parliamentary approval.

Work and Pensions Secretary Pat McFadden said: “We said we’d act to tackle this gross unfairness and we’re delivering on that promise.

“For too long these violent criminals have had their living costs paid by the taxpayer twice over, while their victims and families paid the price.

“That ends today because victims and taxpayers deserve a system that is fair and supports only those who genuinely need it.”

Parents of Barnaby Webber and Grace O’Malley Kumar, who were killed by Valdo Calocane in Nottingham in 2023, welcomed the announcement.

Calocane was convicted of manslaughter on the basis of diminished responsibility.

Emma Webber, Barnaby’s mother, said: “This is long overdue, and simply the right thing to do.

“It was a disgrace that Calocane and offenders like him have ever received taxpayers’ money.

“A hospital bed does not erase the egregious crimes committed, nor the destruction they have caused.

“Closing this loophole finally delivers some basic accountability that victims deserve.”

Dr Sanjoy Kumar, Miss O’Malley-Kumar’s father, said: “Our campaign has always been about accountability and fairness.

“On the principle of fairness alone, we do not see why taxpayers should fund benefits while they are incarcerated.

“We are grateful to the Secretary of State Pat McFadden for taking action and listening to our campaign which always been about what is good for the country.”

Kennedi Westcarr-Sabaroche was killed by her partner Gogoa Lois Tape, who was given a hospital order detaining him indefinitely after he pleaded guilty to manslaughter by reason of diminished responsibility.

The victim’s mother Linda Westcarr said: “I believe it is right that the Government reviews benefit entitlement for those who have committed the most serious offences, particularly where public money, funded by taxpayers, is involved.

“For many victims’ families, the question of whether serious offenders should continue to receive benefits raises understandable concerns about fairness, accountability and the values we uphold as a society.

“In my view, this is not simply a question of policy, it is also a matter of moral responsibility and ensuring that the impact on victims and their families is properly recognised.”

She added: “Kennedi mattered. Her life mattered. The voices of victims’ families must be heard, and their suffering must never be overlooked when decisions are made about the consequences of serious crime.”

The proposed regulations apply to individuals subject to a Section 37 order under the Mental Health Act 1983 and a Section 57A order under the Criminal Procedure (Scotland) Act 1995.

The offences covered include manslaughter, attempted murder, wounding with intent to cause grievous bodily harm, rape, assault by penetration and rape of a child under 13.

Murder is not included as a hospital order is not applicable because the offence attracts a mandatory life sentence.

The change in regulation is expected to affect about 2,500 offenders already in hospital and approximately 200 a year in future, the Government said.

The full financial impacts of the approach will be published as part of the 2026 budget on October 28.

The NHS will continue to provide appropriate mental health support to the offenders affected.

Helen Whately, the shadow work and pensions secretary, said: “Killers and rapists should not pocket benefits from a hospital bed.

“Labour has taken all year to stop a loophole it promised to close. And tens of millions saved barely makes a dent in the benefits bill Labour has let spiral out of control.

“The Conservatives would make universal credit a conditional, time-limited benefit, so taxpayers’ money goes only to those who genuinely need it.”