The Department recognises the importance of safeguarding the welfare of claimants who have incurred debt. Under Universal Credit there is a structured approach to deductions from benefit, which simplifies the complex arrangements that exists within legacy benefits. From October 2019 the maximum rate of deductions from a claimant’s standard allowance will be reduced from 40% to 30%. From October 2021 we are increasing the recovery period for advances from 12 to 16 months, further supporting those in financial need.
If a claimant considers that they are facing financial hardship because of the amount that is being deducted from their Universal Credit award, they can ask the Department to consider reducing their deductions. Furthermore, work coaches can pause some repayments in certain circumstances to ensure they are manageable. This is called a financial hardship decision.
During 2018/19 there were: (a) 1.043m claimants with deductions from UC for UC Advance repayments; (b) 0.749m claimants with deductions from UC for non-UC debts; and; (c) 0.491m claimants with deductions from UC for both UC Advance repayments and non-UC debts in 2018/19 (this volume is included in volumes for (a) and (b).