Dean SpruceDeductions from Universal Credit (UC)
By Julie Holdcroft, Stoke North and Staffordshire Citizens Advice Bureau
Money can be taken from your UC when there’s no other way for you to repay debts for things like rent, gas, electricity, water and council tax. Your UC can be further reduced if you owe money for things such as an Advance Payment, Sanctions, or a Benefit overpayment.
Many people with multiple and complex needs find that they are having the maximum amount deducted from their UC. Freedom of Information data shows that over 60% of UC claimants are having their benefit cut to pay off debts and loans, including Advance Payments and, 25% of UC claimants are in problem debt compounded by excessive deductions from their benefit, according to the debt charity StepChange.
In October 2019, the overall maximum percentage rate for all debts and deductions that can be taken from a UC payment was reduced from 40% to 30% of the claimant’s UC standard allowance.
However there are two exceptions to this rule:
- Last Resort Deductions (arrears of housing and fuel), and
- ongoing monthly costs for utilities (gas, electricity and water) where there are also arrears being taken for them.
A maximum of 3 deductions can be made at one time.
Financial Hardship
If you are experiencing significant financial hardship, deductions from your UC for debts can be renegotiated. You should contact the DWP Debt Management Team on 0800 916 0647. Financial hardship can be considered by the DWP if you have deductions being taken from your UC for a Tax Credits debt, other benefit debt, a Social Fund Loan or rent arrears (if the rent arrears are being taken at a rate greater than 10% of the standard allowance).
Court Fines
People experiencing multiple and complex needs are more likely to have deductions for Court fines. The Law states that the DWP can take between 5% of the standard UC allowance and no more than £108.35 in order to repay a Court Fine. However in practice, the DWP system default is the maximum rate of £108.35. This is in addition to deductions for other debts, leaving people with very little to live on, often nowhere near enough to cover even essential living costs. The person is left in a financially vulnerable position, totally reliant on Foodbanks to eat and, for some there is a return to offending in order to survive.
There are things you can do to try to lower deductions for Court Fines:
- You should always check whether you are liable for the Fine or any of the debts being recovered from your UC. Advice from agencies such as your local CAB or money advice service should be sought.
- If you are liable for the Court Fine you can request the amount being deducted is lowered either by putting it on to your UC Journal or by calling the UC helpline on 0800 328 5644.
- At the same time that you ask the DWP to reduce the amount being deducted, you can contact the Court to make a request to withdraw their application to the DWP for UC deductions. A Means Hearing at court can then be arranged to review your circumstances and set recovery at an affordable amount.
- If the DWP refuse to lower deductions or say that they are bound by law to take full deduction, then an official complaint should be made. This decision cannot be appealed but can be challenged via Judicial Review. You should seek advice from a Welfare Benefits Specialist about this. You can also challenge the Court if they say they cannot withdraw their application.
References
Social Security Fines (Deductions from Income Support) Regulations 1992 http://www.legislation.gov.uk/uksi/2013/612/made