Universal credit deductions when you owe money

Find out when your universal credit can be reduced to pay off benefit advances or overpayments, rent arrears and other debts.

When your universal credit can be reduced

Your monthly universal credit payment can be reduced to pay back the following to the Department of Work and Pensions (DWP):

  • a universal credit advance

  • a budgeting advance or budgeting loan

  • hardship payments

  • benefit and tax credit overpayments

Deductions usually start automatically if you get an advance or if an overpayment is identified.

Third party deductions

Your landlord, utility provider or council can also ask for deductions to be made and paid to them for:

  • rent or service charge arrears

  • gas, electricity or water debts

  • council tax arrears

You won't be asked for your permission but you should be given the chance to provide evidence if you disagree that you're in arrears.

During the coronavirus outbreak

Deductions for benefit overpayments and budgeting loans were paused for 3 months due to the outbreak. These types of deductions restarted in July.

You'll get a letter from the DWP or a note in your universal credit journal telling you that your deductions have started again.  

You can ask for lower deductions or a delay to these types of deductions if you're in serious financial hardship. Contact DWP debt management on 0800 916 0647. 

How much can be taken

There's a cap on the total amount that can be deducted each month to repay debts.

Your deductions could be lower than the cap.

From 6 April 2020 the maximum monthly deduction is usually:
Single claim - aged under 25£102.82
Single claim - aged 25 or over£122.97
Joint claim - both aged under 25£146.58
Joint claim - either of you aged 25 or over £178.21£178.21

When deductions can be higher

The DWP can only deduct more than this as a last resort to help prevent an eviction or disconnection of your gas or electricity.

If you're sanctioned

Your universal credit can be reduced if you don't meet a condition in your claimant commitment. This is called a sanction.

You can ask for a hardship payment if you're struggling because of the sanction.

Hardship payments have to be paid back through deductions from universal credit. 

Deductions for debts should stop or reduce while you're sanctioned unless the DWP makes deductions to prevent eviction or disconnection.

Last updated: 8 July 2020

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