There’s some good news for Universal Credit claimants this month as the amount of money that can be taken from their claims to repay debts is being reduced. Steven, our Money Advice Officer, explains what this means and why it’s a positive for claimants.
What can be deducted?
There’s lots of debts that can be repaid by amounts being taken out of Universal Credit, for example:
Benefit & Tax Credit Overpayments
Benefit Advance repayments
Water charges & arrears
Council Tax arrears
Historic Social Fund repayments
There’s different percentages of the standard allowance that can be taken for each type of deduction, but there’s an overall maximum percentage that can be taken, which has been set at 40%.
From October 2019, this maximum amount is being reduced from 40% to 30% of the standard allowance. This is good news because it means that you can be left with more of your Universal Credit money.
For a single person, the maximum amount is being reduced by £31.78 per month and for a couple it’s £49.89 per month (for over 25’s).
What does this mean?
If you have lots of deductions being made from your Universal Credit, this change means that you will have more money in your pocket each month because less can be taken away to repay debts. However, it will also mean that it will take longer to pay back the money you owe. The Government has said this change will apply to new and existing claims for Universal Credit, but there may be cases where more than 30% needs to be taken temporarily, for example if an advance payment will not be paid back within the 12-month time limit.
Where to get help
Residents of Warrington Housing Association, customers of WHiA and members of LifeTime can contact Steven for help and advice about this issue. Otherwise, you can contact your local advice agency such as Citizens’ Advice.