Deductions for advances and debts from universal credit
On Universal Credit there are strict rules about how much can be take in deductions each payment, to ensure that you do not suffer financial hardship - according to legislation.
The maximum amount in total is set at 40% of standard allowance per month -
There are exceptions to this 40% rule:
There are individual deduction rates or set rates for each individual deduction but if you owe various things, then the 40% of standard allowance is what can be taken overall - unless exception above applies.
The maximum amount in total is set at 40% of standard allowance per month -
- Single person, under 25 - £100.71
- Single person, 25 and over - £127.13
- Joint claim, both under 25 - £158.08
- Joint claim, one or both over 25 - £199.56
There are exceptions to this 40% rule:
- if you owe money for electric, gas or water and it has been arranged that your ongoing usage should come directly from your UC, then this can be taken on top of the 40%
- if you owe rent arrears and are already paying back 40% for advance, sanction or penalty, then they can collect payment for arrears on top of the 40% in order to help prevent eviction.
There are individual deduction rates or set rates for each individual deduction but if you owe various things, then the 40% of standard allowance is what can be taken overall - unless exception above applies.
Advances
When you agree to an advance the repayment arrangements are explained to you. The maximum they can collect per month for advances is 40% of standard allowance. If you are already paying back 40% of standard allowance for advances then no other debts can be collected - unless an exception applies, as above (amounts are monthly)
When you agree to an advance the repayment arrangements are explained to you. The maximum they can collect per month for advances is 40% of standard allowance. If you are already paying back 40% of standard allowance for advances then no other debts can be collected - unless an exception applies, as above (amounts are monthly)
- Single person, under 25 - max. £100.71
- Single person, 25 and over - max. £127.13
- Joint claim, both under 25 - max. £158.08
- Joint claim, one or both over 25 - max, £199.56
Rent Arrears
Rent arrears can be taken at a minimum of 10% of standard allowance and a maximum of 20% of standard allowance (amounts are monthly)
Rent arrears can be taken at a minimum of 10% of standard allowance and a maximum of 20% of standard allowance (amounts are monthly)
- Single person, under 25 - £25.18 or £50.35
- Single person, 25 and over - £31.78 or £63.56
- Joint claim, both under 25 - £39.52 or £79.04
- Joint claim, one or both over 25 - £49.89 or £99.78
Ordinary benefit over payments (tax credits, income support, JSA, ESA, housing benefit)
As long as these are not related to fraud then then they follow ordinary rules.
If you have no earned income or earnings below your work allowance on your claim then a maximum of 15% of standard allowance can be deducted (amounts are monthly)
If you have earnings above the work allowance on your claim then a maximum of 25% of standard allowance can be deducted (amounts are monthly)
Please note that advance repayments take priority over other debts, If you are already paying back money for advances, then it may mean that they are only able to collect a small amount for ordinary debts so they adhere to the 40% of standard allowance rule explained above.
Examples
As long as these are not related to fraud then then they follow ordinary rules.
If you have no earned income or earnings below your work allowance on your claim then a maximum of 15% of standard allowance can be deducted (amounts are monthly)
- Single person, under 25 - max, £37.77
- Single person, 25 and over - max. £47.67
- Joint claim, both under 25 - max. £59.28
- Joint claim, one or both over 25 -max. £74.83
If you have earnings above the work allowance on your claim then a maximum of 25% of standard allowance can be deducted (amounts are monthly)
- Single person, under 25 - max, £62.94
- Single person, 25 and over - max. £79.46
- Joint claim, both under 25 - max. £98.80
- Joint claim, one or both over 25 -max. £124.72
Please note that advance repayments take priority over other debts, If you are already paying back money for advances, then it may mean that they are only able to collect a small amount for ordinary debts so they adhere to the 40% of standard allowance rule explained above.
Examples
- Sarah is single and over 25. She took a new claim advance and repayments are £110 per month. A tax credits debt has arose and she has received notification that she owes £3500. The 40% rule means that they cannot take more than £127.13 per month off her for advance and ordinary debt. £110 will be paid to her advance as that takes priority. Until that advance is paid off £17.13 will be deducted for tax credits debt.
- Sophie is single and over 25. She took a new claim advance and repayments are £40 per month. She owes income support £350 from before she claimed Universal Credit. This can be collected at a max rate of £79.46 as she works and earns over the work allowance. As her advance repayment is relatively small, that means that the full £79.46 can be collected as it totals £119.46 - this is less than the 40% rule.
- Mark and Jean have a joint claim and took an advance to be repaid at £198 per month. A tax credits debt of £5000 exists. The 40% rule means that they cannot take more than £199.56 per month. £198 will be paid to their advance as this takes priority. Until that advance is paid off £1.56 will be deducted for tax credits debt.
PLEASE NOTE: ONCE YOU START YOUR CLAIM FOR UC,
YOUR ENTITLEMENT TO LEGACY BENEFIT ENDS.
IF YOU RECEIVE A PAYMENT FOR JSA, ESA, INCOME SUPPORT OR HOUSING BENEFIT* BEFORE YOUR FIRST ASSESSMENT PERIOD ENDS
AND THIS RELATES TO A PERIOD AFTER YOUR CLAIM FOR UC,
THEN THIS WILL BE TREATING AS OVERLAPPING ENTITLEMENT.
THIS WILL BE DEDUCTED £ FOR £ AND
TAKEN OFF YOU ON TOP OF YOUR DEDUCTIONS FOR ADVANCE AND DEBTS.
*YOU WILL BE ENTITLED TO A 2 WEEK RUN ON OF HOUSING BENEFIT.
THIS DOES NOT AFFECT YOUR UC PAYMENT.
YOUR ENTITLEMENT TO LEGACY BENEFIT ENDS.
IF YOU RECEIVE A PAYMENT FOR JSA, ESA, INCOME SUPPORT OR HOUSING BENEFIT* BEFORE YOUR FIRST ASSESSMENT PERIOD ENDS
AND THIS RELATES TO A PERIOD AFTER YOUR CLAIM FOR UC,
THEN THIS WILL BE TREATING AS OVERLAPPING ENTITLEMENT.
THIS WILL BE DEDUCTED £ FOR £ AND
TAKEN OFF YOU ON TOP OF YOUR DEDUCTIONS FOR ADVANCE AND DEBTS.
*YOU WILL BE ENTITLED TO A 2 WEEK RUN ON OF HOUSING BENEFIT.
THIS DOES NOT AFFECT YOUR UC PAYMENT.
Fraud overpayments, recoverable hardship payments and administrative penalties
These can be taken at a maximum of 40% of standard allowance (amounts are monthly)
These can be taken at a maximum of 40% of standard allowance (amounts are monthly)
- Single person, under 25 - max. £100.71
- Single person, 25 and over - max. £127.13
- Joint claim, both under 25 - max. £158.08
- Joint claim, one or both over 25 - max, £199.56
Fines
This has a flat rate max amount for everyone
This has a flat rate max amount for everyone
- £108.35 per month
Council tax arrears
This can be collected at 5% of standard allowance (amounts are monthly)
This can be collected at 5% of standard allowance (amounts are monthly)
- Single person, under 25 - max. £12.59
- Single person, 25 and over - max. £15.89
- Joint claim, both under 25 - max. £19.76
- Joint claim, one or both over 25 - max, £24.94
Please note - this is not an exhaustive list of what can be deducted from Universal Credit but the 40% rule will still apply, unless an exception applies for rent arrears or ongoing usage of gas, electric or water.
Also explore...
Basic info and new claims
Long term health condition or disability
Working and Earning on UC
Claimant Commitment
Basic info and new claims
Long term health condition or disability
Working and Earning on UC
Claimant Commitment
