factchecking myths and misconceptions about universal credit

“I can’t change the deductions being taken from my universal credit”

The short answer:

You can negotiate – but within certain limits

How many deductions can be made?

It is possible that you may be having a number of deductions taken from your monthly payment. The DWP can take up to three deductions at any one time for payments such as rent arrears, fuel and water costs, council tax, or fines.

However, repayments of debts to the Department (or HMRC) - eg recovery of advances, hardship payments or overpayments - can be taken on top.

How much can be taken from my award?

Generally, the maximum that can be taken each month is 40 per cent of your standard allowance, although the DWP can take more if the excess is for rent payments or fuel costs and it believes it is in your best interests to do so.

NB – the 40 per cent maximum is due to reduce to 30 per cent in October 2019.

How much is taken for each debt?

Deductions for fuel and water arrears, and for council tax arrears are paid at a fixed amount of 5 per cent of the standard allowance so these cannot be negotiated.

Rent arrears can be deducted at a rate between 10 per cent and 20 per cent of the standard allowance. It is common for the DWP to start deductions at 20 per cent so you can negotiate to get it reduced.

Repayment of debts to the DWP (or HMRC) can be recovered at up to

  • 40 per cent for hardship payments or overpayments where there has been fraud
  • 25 per cent if you are working
  • 15 per cent in other cases

These are maximum amounts and there is scope to get them reduced.

Tip: If you are struggling to manage due to the level of deductions from your benefit ask to be referred to debt management who can discuss your financial situation and agree lower deductions.

Law and case law:

Schedule 6 of the Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Claims and Payments) Regulations 2013 set out when the DWP can take deductions from your benefit.

Official guidance:

Chapter D2 of Advice for Decision Makers explains how recovery of debts are prioritised, and the rules for maximum amounts.

Need more help?

If you need help in finding out more about your rights and the options available to you, do consider contacting a local independent advice organisation. 

Enter a postcode on our advicelocal site to find details of advice organisations in your area. They will usually be able to offer free advice and support, and help to answer any questions you have.

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