Date 18/03/2025
Universal Credit claimants can have various deductions taken from their UC entitlement including for repaying advances and debts, including those owed to the DWP (such as repaying overpayments and hardship payments), to third parties (for things like rent, utilities, and council tax) and child support.
A claimant can have multiple deductions taken from their UC award at the same time, but there is limit on the total amount that can be deducted for certain deductions – currently this limit is 25% of the claimant’s Standard Allowance (this limit does not apply to fraud penalties or sanctions).
The types of deduction that can be taken are ordered by priority. Deductions for a fraud penalty, sanction or advance are taken first. If the total of these is not above 25% of the claimant’s Standard Allowance then other deductions can be taken However, once the 25% limit is reached, any remaining (lower priority) deductions cannot be taken unless it is a ‘last resort deduction’.
Changes ahead
In last year’s Autumn Budget, the Chancellor announced a reduction in the level of debt repayments that can be made from a claimant’s UC entitlement.
From April the total maximum limit for all deductions, apart from fraud penalties and sanctions, is reducing to 15% due to the government’s new Fair Repayment Rate.
In addition, deductions for child support will move up the priority list – to above repaying UC advances and third-party deductions for rent arrears.
Read Housing Systems full article HERE
