What deductions are made

Once the DWP have worked out how much Universal Credit you are entitled to they will then go on to take any relevant deductions from the award before making the payment.

These deductions could be for:

  • A sanction
  • Repaying an Advance Payment
  • Repaying certain priority debts (such as rent, utility bills) owed to a third party
  • Paying Court Fines
  • Child Support Payments
  • Repaying a Hardship Payment
  • Benefit Overpayments
  • Other money owed to the DWP such as a social fund loan and civil/fraud penalties

Sanctions take priority over the other deductions listed and most other deductions will be temporarily suspended when a sanction has been imposed.
For more information about sanctions – see I’ve been sanctioned.

The most that can be deducted from your Universal Credit award for the other deductions is 25% of your Standard Allowance (reduced from 30% in April 2021).

How will I know what the deduction is for?

The DWP will tell you if a deduction is going to be made – they’ll do this either in your online journal if you have one, or by letter.

There will also be details of any deduction in your online payment breakdown. If no information is given about what the money is being taken for, or you don’t think you owe money, leave a message for your Work Coach in your journal or ring the Universal Credit helpline and ask for clarification.

If you don’t have enough to live on

If the deduction is for:

  • A benefit overpayment
  • A Social Fund loan
  • Rent arrears (and more than 10% of your standard allowance is being deducted)

Then you can ask for a smaller deduction if you don’t have enough money to live on.

You’ll need to show the DWP that you don’t have enough to live on – this is called financial hardship.

You’ll need to:

  • Give them a financial statement showing your income and what you spend your money on.
  • Show you can’t meet your basic living costs with the current rate of deduction.
  • Send this information through your online journal or in a letter if you don’t have an online account.

If the deduction is for:

  • An Advance Payment

Then you can ask the DWP to defer your repayments for 3 months.

If you think you won’t have enough money to live on because you’re paying back an overpayment, contact a Benefits Adviser or your local Citizens Advice. They can help you budget or ask the DWP to take repayments at a lower rate.

IMPORTANT: Talk to a Money Adviser or Benefits Adviser if deductions from your Universal Credit are causing you problems.