Universal Credit: Overpayments

Department for Work and Pensions written question – answered on 29th June 2022.

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Photo of Justin Madders Justin Madders Shadow Minister (Future of Work), Shadow Minister (Business and Industrial Strategy)

To ask the Secretary of State for Work and Pensions, what recent assessment her Department has made of the (a) effectiveness and (b) impact on claimants of the requirement for all overpayments to be collected from Universal Credit claimants in the context of the proportion of claimants who are having a collection for an overpayment applied.

Photo of David Rutley David Rutley Assistant Whip (HM Treasury), The Parliamentary Under-Secretary of State for Work and Pensions

DWP has a responsibility to the taxpayer to recover any monies overpaid to benefit claimants and to do so in the most efficient way possible. Last year, working with Local Authorities, we recovered £1.0 billion of overpaid benefit.

Recovery from benefit remains the most efficient source of recovery, with 90% of debt recovered this way in 2021-22. However, we recognise the importance of safeguarding the welfare of claimants who have incurred debt and legislation protects claimants from excessive deductions. This means there are limits set for individual deductions. In Universal Credit the overall deduction cap is set at 25% of the standard allowance, having been reduced from 40%.

Additionally, any deductions from benefit are prioritised which means that 3rd party deductions to help pay utility or rent arrears (for example) take precedence over overpayment recovery deductions.

Anyone experiencing hardship with repayments is encouraged to contact DWP Debt

Management to negotiate a reduction in their rate of repayment, or a temporary suspension of repayment, depending on financial circumstances.

We remain an active participant in Breathing Space, launched in May 2021 as part of The Debt Respite Scheme to support debtors struggling to cope with problem debt. We also signpost customers to trusted partners, who can provide impartial money and debt advice.

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