The Government recognises the importance of safeguarding the welfare of claimants who have incurred debt. Universal Credit already has procedures and regulations in place to protect claimants from excessive deductions. The maximum rate of deductions cannot normally exceed 40 per cent of the Universal Credit standard allowance, and from October 2019 this will be reduced to 30 per cent.
However, last resort deductions can be applied to protect vulnerable claimants from eviction and/or having their fuel supply (gas/electricity) cut off, by providing a last resort repayment method for arrears of these essential services. In these circumstances, when it is considered to be in the best interests of the claimant and their family, deductions may be taken above the 40 per cent limit.
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.
Of all eligible claims to Universal Credit Full Service due a payment in Feb 2019, 57% (840,000 claims) had a deduction.
Of this 840,000 claims with a deduction:
a) 50% (420,000 claims) had deductions up to 20% of the Standard Allowance (29% of all eligible claims).
b) 20% (170,000 claims) had deductions between 21% and 30% of the Standard Allowance (12% of all eligible claims).
c) 28% (238,000 claims) had deductions between 31% and 40% of their Standard Allowance (16% of all eligible claims).
d) 1% (13,000 claims) had deductions above 40% of their Standard Allowance (1% of all eligible claims).
Claim numbers may not match official statistics caseloads due to small methodological differences.
Claim numbers are rounded to the nearest 1,000
When categorising claims into the groups above the figures for the percentage of the Standard Allowance for individual claims have been rounded to the nearest percent.
Deductions include advance repayments and all other deductions, but exclude sanctions and fraud penalties which are reductions of benefit rather than deductions.