Deductions

What deductions are made

The DWP might take money off your Universal Credit payments for:

  • Sanctions
  • Advance payments
  • Benefit overpayments
  • Child maintenance payments
  • To pay off debts for rent, council tax and/or utility bills
  • A court fine

How deductions are made

A Universal Credit adviser will decide how much can be deducted from your benefits.
In most cases, the money will be taken automatically and you won’t need to give your permission.

The deduction will show in your online account. If no information is given about what the money is being taken for, leave a message in your journal or ring the Universal Credit helpline and ask for clarification.

For more information about sanctions – see I’ve been sanctioned.

If you’ve had an overpayment

You’ll get less each month until you pay it back. In most cases, the Department for Work and Pensions (DWP) will reduce your payment by up to 15% or 25% of your ‘Standard Allowance’ – this is the basic amount you get, not including extra amounts called ‘Elements’. They take up to 15% if you are not working, or up to 25% if you have earnings.

For example – if your payment is reduced by 15% of your Standard Allowance and your Standard Allowance is usually £409.89 a month, your total payment will be reduced by £61.48.

Your payment can also be reduced if your overpayment happened because of fraud. The DWP won’t usually take more than 30% of your Standard Allowance.

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 Advise. They can help you budget or ask the DWP to take repayments at a lower rate.

If your Universal Credit is reduced to pay off your debts

You’ll only get a deduction if the organisation you owe money to asks the DWP – this is called a ‘third party deduction’ – and only certain organisations are allowed to do this.

Deductions for ‘third party deductions’ can only be made for:

  • Rent arrears and other housing costs like service charges – the deduction can be between 10% and 20% of your Standard Allowance
  • Gas, electric or water arrears
  • Council tax bills arrears
  • Child support maintenance
  • Some loans
  • Some fines

Your Universal Credit will be reduced by 5% of your basic ‘Standard Allowance’ for most third party deductions – more money can be taken for rent arrears and court fines.

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.

You’ll never get more than 3 third party deductions at a time and in most cases no more than 30% of your standard allowance can be taken.

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.

IMPORTANT: Talk to a Benefits Adviser if deductions from your UC are causing you problems.