Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what steps she is taking to tackle the economic effect on claimants of universal credit that are subject to deductions taken to repay debt.

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 will not normally exceed an amount equal to 40% of the Universal Credit standard allowance. However, where it is in the best interest of vulnerable claimants, to protect them from being made homeless or having their fuel disconnected, deductions in excess of the 40% standard allowance may be applied. This is only for ‘last resort’ third party deductions for arrears of service charges, rent, gas and electricity. When we take deductions for gas and electricity arrears, we will also take them for the on-going monthly cost of these utilities.

Claimants’ circumstances are always taken into account when applying debt repayment thresholds and to avoid undue hardship. If a claimant is in financial difficulty as a result of the level of deductions, where it relates to benefit debt, a social fund loan or rent arrears, they can request that a reduction be considered. Similarly, if a claimant is having difficulty repaying a benefit overpayment, they can request a reconsideration of the amount that is being taken. Any reduction will be based on the individual circumstances of the claimant rather than the amount of the overpayment, which helps to ensure that a sustainable repayment plan based on affordability is put in place.