Get all your news in one place.

100’s of premium titles.
One app.

Start reading

Get all your news in one place.

100’s of premium titles. One news app.

Start reading

Glasgow Live

National

Linda Howard & Alexander Smail

11 reasons why DWP Universal Credit claimants have money deducted from payments

Universal Credit DWP rese Coffey King Charles III Selaine Saxby GovUK Queen Elizabeth II

Approximately 5.6 million people throughout Scotland and the UK receive Universal Credit from the Department for Work and Pensions (DWP).

The benefit is for people who are unemployed or on a low income to help with daily living costs. Official data reveals that around 189,000 households in Scotland had an average of £60 deducted from their payments a month this year.

There are a number of reasons why the DWP may deduct money from your payments, such as if you are repaying a DWP loan or advance. Deductions may also be made following overpayments.

With the cost of living crisis continuing to worsen, households may be unaware they could reduce the amount they are required to pay back each month.

In a meeting prior to the parliamentary summer break, former Secretary of State for Work and Pensions Dr Therese Coffey said: “If people are struggling, they can contact our management system in order to discuss what potential changes could be made. That is still open to them as opposed to being automatically deducted.”

Her response followed Conservative MP Selaine Saxby, who highlighted that deductions can amount to as much as 20 per cent of a claimant's benefit payments on average.

Coffey continued: “We have put in place things like advances, which is a phasing of how people receive their benefits. We have extended that opportunity to potentially over two years, to have 25 payments instead of 24, but gradually we have been reducing the deduction cap.”

She also reiterated that the deduction cap is currently 25 per cent, as reported by the Daily Record.

When Saxby questioned whether there is an “opportunity, given that there is this lag between the inflation figures reaching benefit claimants’ pockets, to have a pause or freeze on these deductions over that period”, Coffey stated that claimants should contact the DWP if they require support.

She said: “There is a tailored approach that is going to be taken by individuals to speak with the DWP about their own individual situation rather than having a blanket approach.

“It is important that the debt will still be there. You are just extending potentially the lifetime of it being recovered. I do not know if we should be making that decision for people on how they manage that debt relationship.”

People claiming Universal Credit from the DWP can view any deductions on their monthly statement. Statements can be found on claimants' online accounts under ‘Payments’.

Here is a roundup of 11 types of debt that can result in deductions to Universal Credit payments. More guidance can be found on the GOV.UK website here.

11 types of debt that result in a benefit deduction

1. Advance payments

This refers to repayment of Universal Credit advances, which can be paid to claimants who are in financial hardship while they wait for their first payment.

2. Universal Credit overpayment

In situations where you have received too much money through Universal Credit, the DWP will likely deduct money from your payments to recoup the sum.

DWP guidance states: “If you believe you have been overpaid but have not heard from Universal Credit, you need to contact Universal Credit to tell them about this.”

3. Benefit overpayment

This refers to situations in which you may have received too much money for any other benefit, including Tax Credits and Housing Benefit.

The DWP has warned that penalties can be applied to benefit overpayments, stating: “If you believe you have been overpaid but have not heard from DWP, you must report it immediately. If not, you may be prosecuted or have to pay a penalty.”

4. Recoverable hardship payment

Claimants can apply for a hardship payment if their Universal Credit has been reduced as a result of a fraud penalty or sanction.

This needs to be paid back after the fraud penalty or sanction has ended, with the DWP stating that “when the amount you pay back has been agreed it cannot be changed”.

5. Budgeting and crisis loan repayment

This refers to the repayment of a budgeting or crisis loan. The amount repaid is agreed at the time the loan is taken out.

Other debts you owe

The following are referred to as third party deductions, and are deducted from Universal Credit payments to cover other debts.

They include:

6. Utilities such as electricity, gas and water

7. Council Tax

8. Child maintenance

9. Rent

10. Service charges

11. Court fines

How much will be taken off your Universal Credit payment?

The amount that is deducted from your Universal Credit payment is calculated at the end of every calendar month. It may be changed if your earnings change, or any other benefit you receive changes.

The DWP states: “It is not possible to tell you how much will be taken before this calculation takes place.

“Normally the most that can be taken from your payment is 25% of your Universal Credit Standard Allowance.”

This refers to the basic amount claimants are entitled to, prior to money for expenses such as childcare and housing costs are added.

Claimants may have more than this deducted if they pay a ‘last resort deduction’. This helps to prevent claimants from being evicted or having their utilities frozen.