Created 08/07/2019

Clients often struggle to cope on Universal Credit due to the large number of deductions taken from their expected payments.

There is scope to ask for the repayment rate to be reduced where it is causing hardship.

The government say-

'Universal Credit already has procedures and regulations in place to protect claimants from excessive deductions. The maximum rate of deductions cannot normally exceed 40 per cent of the Universal Credit standard allowance, and from October 2019 this will be reduced to 30 per cent.

If a claimant is in financial difficulty as a result of the level of deductions, where it relates to benefit debt, a social fund loan or rent arrears, they can request that a reduction be considered. Similarly, if a claimant is having difficulty repaying a benefit overpayment, they can request a reconsideration of the amount that is being taken. Reductions are always based on the individual circumstances of the claimant, rather than the amount of the overpayment, which helps to ensure that a sustainable repayment plan based on affordability is put in place.

The claimant should provide reasonable evidence to support their request. This could include information about the household income and expenditure where hardship is claimed on financial grounds. Where hardship is claimed because either the claimant or a member of their family is seriously ill, they would need to provide supporting evidence to explain how or why recovery would be detrimental to the health or welfare of the claimant or their family.

A Repayment Negotiation Framework based on the individual circumstances of the customer, rather than the size of the debt and repayment period has been developed. This makes the process much simpler, and ensures both on and off benefit customers are treated fairly. This framework is contained within the Benefit Overpayment Recovery Guide which can be found on via the link below.

page 38 of the government's Benefit overpayment recovery guide December 2018 gives more details.  The guide also gives details on how to get an overpayment waived or written off.