What to do about universal credit deductions for debt

How to deal with deductions from your universal credit if you can't afford them.

When you could have deductions

The Department of Work and Pensions (DWP) can deduct money from your universal credit to pay off benefit advances or overpayments, and some other priority debts.

Find out when your universal credit payment can be reduced.

Options for dealing with deductions

Universal credit deductions can make it even harder to budget for the basics.

Your main options could be to:

• ask for lower deductions

• challenge a decision if you think it's wrong

• negotiate a more affordable repayment plan for third party debts

A debt adviser could help.

Who to contact about deductions

Different DWP teams deal with certain types of deductions.

Work coach or universal credit helpline

Use your online journal or call the universal credit helpline on 0800 328 5644 to discuss deductions for:

• universal credit advances

• budgeting advances

• rent arrears or other priority debts

You can ask your work coach or universal credit helpline adviser to reduce deductions for advances and rent arrears if you can't afford them.

You can't ask them to reduce the rate of deductions for energy, water or council tax debts. But you should get the chance to dispute the arrears if you disagree with them.

DWP debt management

Call DWP debt management on 0800 916 0647 to discuss deductions for:

• budgeting loans

• hardship payments

• benefit and tax credit overpayments

These deductions were paused temporarily due to coronavirus but restarted from July.

You can ask for lower deductions or a delay to this type of deduction if you're in serious financial hardship.

Asking for lower deductions

You need to show that you can't afford the current deductions.

You'll be asked about your income and outgoings, and if there are any special reasons why the deductions are unaffordable.

Advances

You must usually repay universal credit advances and budgeting advances within a year. Deductions start from your first monthly payment after the advance.

If you can't afford them, you can ask to:

• delay repayments of a universal credit advance for up to 3 months

• extend the repayment period for a budgeting advance up to 18 months

Rent arrears

If you owe at least 2 months' rent, your current landlord can ask the DWP to make deductions to pay off the debt in instalments.

You should be given the chance to dispute the arrears if you disagree with them.

There are rules about how much can be taken each month for rent arrears.

Ask for a lower deduction if it's above the minimum and you can't afford it.

How different debts are prioritised

The DWP have a priority order for deductions.

Deductions for advances, rent arrears and other third party debts take priority over the repayment of budgeting loans, hardship payments and benefit overpayments.

You can't have more than 3 deductions made for third party debts.

Maximum monthly deductions

Total deductions shouldn't usually be more than a maximum monthly amount.

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

How to challenge a decision

Ask for an explanation through your online account if you think your deductions have been calculated wrongly.

If you still disagree or don't get a response, you can ask for a formal review of the decision. This is called a mandatory reconsideration.

Find out more about the mandatory consideration process from Citizens Advice.

Negotiating over rent arrears and other debts

Speak to your landlord, council or utility provider directly to try and agree a more affordable repayment plan outside the universal credit system.  

If you come to an agreement, they can ask the DWP to cancel the deductions and you can start repaying these debts in line with what has been agreed.

Landlords and other third parties may be reluctant to agree to a different arrangement if they're already getting regular instalments through universal credit deductions. 

A debt adviser could help negotiate.

Find out how to deal with rent arrears.