Universal Credit

Department for Work and Pensions written question – answered on 22nd July 2019.

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Photo of Chris Ruane Chris Ruane Shadow Minister (Wales)

To ask the Secretary of State for Work and Pensions, what proportion of claimants of universal credit that have taken an advance payment have seen payments reduced by (a) up to 20 percent (b) between 21 and 30 per cent, (c) 31 to 40 per cent and (d) over 40 percent of the initial amount in each of the last three years.

Photo of Alok Sharma Alok Sharma The Minister of State, Department for Work and Pensions

Universal Credit (UC) new claim advances provide access to a payment for those in financial need, which can be accessed on the same day, until their first UC payment is due. Claimants can access up to 100% of the total expected monthly award, for which they can pay back over a period of up to 12 months.

The Department has taken a number of steps to ensure that advances meet the needs of claimants and that recovery arrangements are personalised and reasonable. The maximum rate of deductions cannot normally exceed 40 per cent of the Universal Credit standard allowance and does not reduce other components of an award, such as money paid for children, housing or when someone is caring for a severely disabled person. From October 2019 this will be reduced to 30 per cent and from October 2021 we are increasing the maximum recovery period for advances from 12 to 16 months.

However, the Government recognises the importance of safeguarding the welfare of claimants who have incurred debt, so last resort deductions can be applied to protect vulnerable claimants from eviction and/or having their fuel supply (gas/electricity) cut off, by providing a last resort repayment method for arrears of these essential services. In these cases, when it is considered to be in the best interests of the claimant and their family, deductions may be taken above the 40 per cent limit.

If a claimant is in financial difficulty as a result of the level of deductions being made they can contact the Department to request that a reduction in deductions be considered.

The latest available data for eligible claims to UC Full Service is provided in table 1:

Table 1

Month Payment Due

Feb-17

Feb-18

Feb-19

%

%

%

up to 20 percent of Standard Allowance

42%

49%

47%

between 21 and 30 per cent of Standard Allowance

20%

19%

18%

31 to 40 per cent of Standard Allowance

35%

31%

33%

over 40 percent of Standard Allowance

3%

1%

2%

Notes

1. The latest month for which data is available is February 2019.

2. When categorising claims into the groups above, the figures for the percentage of the Standard Allowance for individual claims have been rounded to the nearest percent.

3. Deductions include advance repayments and all other deductions, but exclude sanctions and fraud penalties which are reductions of benefit rather than deductions.

4. A claim can have more than one type of deduction applied to a given payment e.g. the total deduction could be the total of both an advance repayment and another deduction type.

5. Figures are for Universal Credit Full Service only; Universal Credit full service was fully rolled out by the end of 2018.

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