Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what measures are in place to help universal credit claimants with the repayment of debt.

The Department recognises the importance of safeguarding the welfare of claimants who have incurred debt, and Universal Credit already has procedures and regulations in place to protect claimants from excessive deductions.

A claimant’s circumstances are always taken into account when applying debt repayment thresholds to avoid undue hardship. 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.

The maximum rate of deductions will not normally exceed an amount equal to 40 per cent of the Universal Credit standard allowance, and from October 2019 this maximum rate will be reduced to 30 per cent. 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 maximum rate 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.

The Department has also implemented a range of measures to further support claimants such as providing a two-week ‘transitional housing payment’ for those who had been receiving Housing Benefit before transitioning onto Universal Credit, and interest free advances, worth up to 100 per cent of their indicative Universal Credit award which can be paid back over 12 months.