Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, whether the information provided in the Benefit Overpayment Recovery Guide Appendix 4, that fines have a maximum deduction rate of £108.35 a month, and a minimum deduction rate of an amount equivalent to five per cent of the claimant’s UC Standard Allowance. Any other deductions being taken reduce the maximum deduction rate pound for pound, so that the total of all deductions doesn’t go above the overall maximum deduction rate of 40 per cent of the claimant’s UC Standard Allowance, is still applicable.

The maximum rate of deductions cannot normally exceed 40 per cent of the Universal Credit standard allowance and does not reduce other components of an award, such as money paid for children, housing or when someone is caring for a severely disabled person. From October 2019 this will be reduced to 30 per cent and from October 2021 we are increasing the maximum recovery period for advances from 12 to 16 months.

The Government recognises the importance of safeguarding the welfare of claimants who have incurred debt, so 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 cases, 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.