Around 4.8 million households in the UK currently claim Universal Credit, meaning there are approximately 5.6 million people who receive regular payments to assist with day-to-day living costs.
Many people who claim the benefit from the Department for Work and Pensions (DWP) may be unaware however, that the UK Government department could deduct money from their monthly payments for a number of reasons.
Principal among these are if a claimant has a debt, arrears, or an overpayment, as reported by the Daily Record.
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Those wishing to check whether their upcoming Universal Credit payment will be the same as their last one can do so online by going to the 'Payments' section of their account and looking for What we take off - deductions’.
Read below for a summary of types of debt that can be collected from Universal Credit payments, or visit GOV.UK website for more in-depth guidance.
1. Advance payments
This is your repayment of a Universal Credit advance.
2. Universal Credit overpayment
This refers to when you have been given too much Universal Credit.
To learn more about any potential overpayments, you can sign into your online account and then go to your journal and check for any messages about the subject.
DWP guidance adds: “If you believe you have been overpaid but have not heard from Universal Credit, you need to contact Universal Credit to tell them about this.”
3. Benefit overpayment
Like Universal Credit overpayment, this refers to when you have been given too much money for any other benefit ‚ including Tax Credits and Housing Benefit.
DWP warned that penalties can be added to a benefit overpayment, stating: “If you believe you have been overpaid but have not heard from DWP, you must report it immediately. If not, you may be prosecuted or have to pay a penalty.”
If you have been overpaid, you will have a journal message or letter explaining what the overpayment is for.
4. Recoverable hardship payment
You are able to apply for a hardship payment if your Universal Credit has been cut due to a fraud penalty or sanction.
You must pay this back once the penalty or sanction has come to an end however, and according to the DWP “when the amount you pay back has been agreed it cannot be changed”.
5. Budgeting and crisis loan repayment
This is your repayment of a budgeting or crisis loan. How much you pay back is agreed at the time you accept the loan.
Other debts you owe
These are known as third party deductions and are taken off your Universal Credit to pay other debts, and include
6. Utilities such as electricity, gas and water
7. Council Tax
8. Child maintenance
9. Rent
10. Service charges
11. Court fines
It’s important to be aware that only three third party deductions can be taken at any one time.
Universal Credit will send you a message in your online journal when a third party deduction starts.
How much will be taken off your Universal Credit payment?
Universal Credit calculates the amount taken from your payment at the end of every assessment period - one calendar month.
The amount taken off may change if your:
- Earnings change
- Other benefits change
DWP guidance explains: “It is not possible to tell you how much will be taken before this calculation takes place.
“Normally the most that can be taken from your payment is 25% of your Universal Credit Standard Allowance.”
This is the baseline amount you are entitled to, before money for things like childcare and housing costs are added.
You may have more than 25% of your Standard Allowance taken off if you pay a ‘last resort deduction’.
A ‘last resort deduction’ helps to prevent you from being evicted or having your utilities cut off, it is paid directly to the person or organisation you owe money to.
What to do if you are struggling to pay back your debt
If you are having trouble paying back your debt, you are able to request a financial hardship decision to lower the amount of benefit debt you repay.
You may be considered for this if you have money taken from your Universal Credit for:
- Benefit debt
- Budgeting Loan and Crisis Loan repayment
- Advances
- Rent arrears - if they’re taken at a rate greater than 10% of the standard allowance
If a decision is made to reduce the amount you pay, it will be applied automatically to your next Universal Credit assessment period.
Find out who to contact about money taken off your Universal Credit payment on the GOV.UK website here.
