Debts which can be deducted

Deductions can be made for debts owed to the DWP other organisations or individuals.

Deductions for debts owed to the DWP include:

• recovering overpayments

• repaying universal credit advances and social fund loans

Deductions for debts owed to third parties include:

• rent arrears to the claimant's current landlord

• fuel costs

• water charges

• council tax arrears

• magistrates' court fines

• child maintenance

• refugee integration loans

Amount which is deducted

Different types of debt have their own rules about how much can be deducted. In most cases the total combined deductions made from universal credit to recover debts are capped at 15 percent of the standard allowance.

The standard allowance is the initial sum of money all universal credit claimant's get based on whether they are claiming as a single person or couple. A claimant can find their standard allowance in their universal credit statements and online journal.

The 15 percent limit comes from DWP policy, not legislation. The DWP can authorise deductions above 15 percent in special cases, such as where it is necessary as a last resort to prevent eviction or disconnection of utilities.

This cap does not include money the DWP pays directly to the claimant's landlord or energy company to cover a client's current rent or fuel costs for that assessment period.

Direct payment of housing costs to landlords

A claimant's landlord or their work coach can apply to have the housing costs element of universal credit paid directly to the landlord. In DWP policies this is known as a type of Alternative Payment Arrangement (APA) called a Managed Payment to Landlord (MPTL)

This is different from deductions for rent arrears as it is about paying the benefit for the current rent directly to the landlord. It is not subject to the 15 percent limit.

When this occurs, it will be noted as a deduction on the universal credit statement.

More information

Find out more about deductions for debts for the public and for professionals.

Guidance for clients

Read the government guidance about money taken off your universal credit payment at Gov.uk.

Find out more about universal credit deductions and how they are calculated on the Shelter website.

Find out more about managed payments to landlords on Shelter Legal.

Guidance for professionals

Professionals can find more information on how deductions for debts are calculated as well as more focused information on deductions for rent arrears and deductions for fuel costs on Shelter Legal.

The DWP provide detailed guidance for decision makers in their Advice for Decision Making. Chapter D2 deals with deductions from benefits for debts. Read chapter D2 of the guidance at Gov.uk.

The DWP provide extensive guidance on how managed payments of housing costs to landlords work in the "paying rent" section of their guide for landlords. Read the universal credit and rented housing guide for landlords at Gov.uk.

Read more about alternative payment arrangements where universal credit is paid to other people or at unusual intervals at Gov.uk.