Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what assessment her Department has made of the potential impact of her Department's proposed changes to the Universal Credit deductions priority order on the (a) volume and (b) timeliness of child maintenance payments.

The Fair Repayment Rate (FRR) was implemented as a permanent change on the 30 April 2025. This measure reduces the overall deductions cap from 25% to 15% of a customer's Universal Credit (UC) standard allowance. This will enable approximately 1.2 million UC households retain more of their award, on average £420 a year or £35 per month. The FRR will impact UC assessment periods that start on 30 April 25 or after.

The FRR measure as an isolated change, would have reduced the current number of child maintenance deductions taken from a UC award, resulting in a negative impact on child poverty. Therefore, in addition to the FRR, the child maintenance deduction was moved higher up the regulated deductions priority order on the 30 April, and for a temporary period of one year.

The reason for implementing the child maintenance deduction measure on a temporary basis is to enable the Department to gather further evidence on the impact the changes will have on UC households with a child maintenance deduction. This evidence will determine the future child maintenance deduction policy.

Outturn data on the full impact of the change to the positioning of Child Maintenance is not yet available. However, modelling of the change by the Department estimates that it will increase the number of monthly Child Maintenance deductions collected from approximately 50,000 to approximately 60,000. This estimate was derived using UC household deductions data from May 2024, the latest available when the modelling was done. Actual figures may differ as a result of changes to the composition and characteristics of the UC caseload in the intervening time.

Timeliness of payments are in line with existing processes: the Universal Credit (UC) deduction is transferred to Child Maintenance Service (CMS) CMS on the Saturday following the UC award payment date and immediately paid out the receiving parent. The payment is subject to usual bank processing and is received in the parent’s bank account in 3-5 working days.