Holding answer received on 11 January 2019
Our internal data shows that, of all Universal Credit Full Service awards in September 2018:
(a) 7% (60,000 claims) of all Universal Credit Full Service eligible* claims had deductions at 40% of the Standard Allowance.
(b) 0.6% (5,000 claims) of Universal Credit Full Service eligible claims had deductions that exceeded the normal 40% maximum deduction rate. These are due to last resort deductions which are only applied to protect claimant welfare by helping prevent disconnection or eviction (for example, service charges, rent, gas or electricity arrears).
*Eligible claimants are claimants that have satisfied all the requirements of claiming Universal Credit; they have provided the necessary evidence, signed their claimant commitment and are eligible and have received their first payment.
These figures do not include sanctions or fraud penalties which are reductions of benefit rather than deductions. In these cases, a priority order is applied so that deductions for arrears of housing costs or fuel costs are applied first, in order to protect claimant welfare. Volumes are rounded to the nearest 1,000.
If a claimant is in financial difficulty as a result of the level of deductions being made they can contact the Department to request that a reduction in deductions be considered.
At Autumn Budget 2018 we announced we will reduce the maximum rate at which deductions can be made from a Universal Credit award from 40% to 30% of the standard allowance, from October 2019. Additionally, from October 2021, the recovery period for advances will increase from 12 to 16 months. This will help over 600,000 families to manage their debts at any one point when roll-out is complete, providing them with, on average, £295 extra a year as their debts are repaid over a longer period.