Universal credit deductions
Paying off energy, water or council tax debts though deductions from your benefit.
Energy, water and council tax debts
Your energy supplier, water company or council can ask for money from your monthly universal credit (UC) payment to pay off these debts.
They must talk to you about other ways you could pay them back first. For example, a repayment plan direct with you.
If the Department for Work and Pensions (DWP) agree, they give the money to your council, energy or water company to pay off your debts over time.
These are sometimes called 'third party deductions'.
Gas, electricity and water companies can only ask for deductions if you still live in the property. If you move home, these deductions should stop.
What is Fuel Direct?
Fuel Direct lets your energy supplier ask the DWP to make a higher deduction for your ongoing energy use.
Your gas or electricity supplier can only ask for this if:
you already have UC deductions for money owed to them
they have looked at other ways you could pay for your gas or electricity
you agree that this can happen
Get free debt advice
A debt adviser can talk to you about other ways of repaying these types of debt.
Once UC deductions are in place it can be hard to get them stopped unless:
the debt is paid off
your council, energy or water company agrees to stop the deductions
A council, energy or water company might suggest UC deductions as a way to pay them back but a debt adviser can give you free and independent advice.
More about:
How breathing space can help with debts
The breathing space scheme pauses payment demands while you get debt advice.
If you're on the scheme, the DWP cannot make new deductions for missed payments for:
rent
council tax
gas, electricity or water
They must also pause any deductions for benefits overpayments.
Ask a debt adviser about breathing space.
How much can be taken?
Each third party deduction is 5% of your UC standard allowance.
Up to 3 different third party debts can be taken at a time. The DWP treats gas and electricity arrears as higher priority than unpaid council tax or water debts.
How much can be taken depends on your age and if you claim as a single person or as a couple.
Table: Third party deductions from April 2024
Amounts in this table are rounded to the nearest pound.
| Claim type | How much is taken for each third party debt |
|---|---|
| Single person - under 25 | £16 a month |
| Single person - 25 or over | £20 a month |
| Couples - both under 25 | £24 a month |
| Couples - either person 25 or over | £31 a month |
The DWP could take more than the amounts in the table if either:
there is a risk of your energy supply being disconnected
you agree to pay for ongoing gas or electricity use through Fuel Direct
There is a higher general limit for all UC debt deductions. For example, if you also have money taken off to repay a UC advance or rent arrears.
Ask for a review
You can ask for a review if you think the DWP should not make deductions.
For example, if:
you move house and do not have the same energy supplier
you have cleared the debt but deductions have not stopped
you did not give consent for deductions for ongoing energy use costs
your gas, electricity or water company or council did not discuss other way of you repaying the debt with you
The review is called a 'mandatory reconsideration'.
Last updated: 19 December 2024
