Deductions that can be taken from your Universal Credit payments

Money may be taken from your Universal Credit payments to pay back money that you owe, or if you have a Fraud Penalty or Sanction.

Who to talk to about money taken off your payment

Who to contact depends on what type of query you have. Find out who to contact

When money can be taken from your Universal Credit payments

Money can be taken from your Universal Credit payments if you:

  • have had a Universal Credit advance or budgeting advance  
  • have had a hardship payment 
  • have had a fraud penalty 
  • have had a sanction 
  • owe money to third-party suppliers, for example, your gas or electricity suppliers, called a Third Party Deduction / Last Resort Deduction 
  • have benefit debt or have received overpayments, or 
  • have been paid too much Tax Credit.

Ways to pay back a Universal Credit Advance

A Universal Credit Advance is a loan to help support you while you are waiting for your Universal Credit payments.

You will need to repay the Advance within the following timescales: 

  • An Advance following a new claim or transferring from another benefit – within 12 months.  We may agree to extend this deadline by up to three months if you are struggling with money.
  • A Change of Circumstances Advance – within six months. We may agree to extend this deadline by up to three months if you are struggling with money.
  • A Budgeting Advance – within 12 months. We may agree to extend this deadline by six months if you are struggling with money.

The repayments taken out of your twice monthly Universal Credit payments will be up to 30 percent of your Standard Allowance (the basic amount of Universal Credit you are entitled to, before extra money for things like childcare and housing costs is added).

If you have more than one Advance to pay back, repayments will be taken in the order given in.  You can check the balance of any Advance you owe through your Universal Credit online account.

If a Fraud Penalty or Sanction is applied to your Universal Credit payments, we will stop taking Advance repayments until the Fraud Penalty or Sanction ends.  You will start to pay back the Advance once your Fraud Penalty or Sanction has ended.

How to pay back a Hardship payment

You may have got a Hardship payment if your Universal Credit payments were reduced because you had a Fraud Penalty or Sanction applied to them and you could not meet your and your family’s basic needs.

You will start to repay the Hardship payment once your Fraud Penalty or Sanction has ended.

When the repayment amount for your Hardship payment has been set, this cannot be changed.

Your Hardship repayments can be suspended for any Assessment Period where your earnings have reached a level at least equal to the Conditionality Earnings Threshold.

The Conditionality Earnings Threshold is when your earnings have reached a level where you do not have to carry out any work-related activity (in other words, you are earning enough).  If you are part of a joint claim, this will be if you and your partner’s total earnings reach the Conditionality Earnings Threshold for couples.

If your earnings stay at or above the Threshold for at least six Assessment Periods after the last Fraud Penalty or Sanction was applied to your Universal Credit payments, we may not ask you to repay the remaining Hardship payment.

How to pay back a Fraud Penalty or Sanction

If you deliberately do not tell us about a change in your circumstances that could affect your Universal Credit payments, or you give us false information, this is fraud. A Fraud Penalty can be applied to your Universal Credit payments to reduce the amount you receive.

If you don’t do the things you agreed in your Universal Credit Commitment, your Universal Credit payments may be reduced for a set period. This is known as a Sanction.

A Fraud Penalty or Sanction will reduce your Universal Credit Standard Allowance (the basic amount of Universal Credit you are entitled to before extra money for things like childcare and housing costs is added) by up to 100 percent if you are single, or up to 50 percent for each person in a joint claim.

If a Fraud Penalty or Sanction is being taken from your Universal Credit payments, no other repayment or deduction will be taken, except for Last Resort Deductions. 

You will only pay one Fraud Penalty or one Sanction at a time. If you are part of a joint claim, both of you can have a Fraud Penalty or Sanction applied to your Universal Credit payments at the same time.

If both a Fraud Penalty and a Sanction are applied to your Universal Credit payments, the Fraud Penalty will take priority and be paid off first.

Third Party Deduction

A third-party deduction is an amount that is taken from your Universal Credit payments and paid direct to the person or organisation you owe money to, such as your landlord or your gas or electricity supplier.

Third Party Deductions can also be taken, without your permission, for things like:

  • housing costs (for example, rent arrears for your current address)
  • unpaid rates, and
  • child maintenance.

These deductions can be made for ongoing costs, not just overdue amounts.

Third Party Deductions are fixed at five percent of your Universal Credit Standard Allowance for each third party. This fixed amount cannot be changed.

We can only take three Third Party Deductions at any one time. We will tell you on your online account when a Third Party Deduction will start.

Last Resort Deduction

A Last Resort Deduction is a type of Third Party Deduction taken from your Universal Credit payments because you owe money for:

  • rent
  • service charges for a home you live in, or
  • gas or electricity.

Last Resort Deductions are made to help prevent you from being evicted or having your gas or electricity cut off.  We will pay this money direct to the third party that you owe money to.

Benefit debt

Benefit debt is an overpayment of government benefits or Tax Credits, loans or Advances that you have to pay back.

Benefit debt includes the following.

  • Social Fund loans
  • Hardship payments
  • Advances of benefits
  • Administrative penalties (a penalty you receive instead of being prosecuted to recover an overpayment)
  • Tax Credit overpayments
  • Housing Benefit overpayments
  • Fraud penalties
  • Benefit overpayments

Overpayments

An overpayment is an amount which has been paid to you that you were not entitled to.

You will pay back any overpayments at a rate of up to 15 percent of your Standard Allowance (the basic amount of Universal Credit you are entitled to before extra money for things like childcare and housing costs is added). If you are part of a joint claim and your household earnings are above a certain level, up to 25 percent can be taken from your Universal Credit payments. You can speak to your Work Coach at your local Jobs & Benefits office to find out more.

Overpayments of Tax Credits

If you are getting Tax Credits and you claim Universal Credit, we will tell
HM Revenue & Customs (HMRC) to stop your Tax Credits. If you receive Tax Credits after you have made your claim to Universal Credit this could result in you being paid too much Tax Credits. The Department will take action to get this money back as well as any other Tax Credit overpayments you have.

When you move to Universal Credit, HMRC will send you a letter called ‘Your Tax Credits overpayments’ (TC1131). This will tell you about any Tax Credit repayments that will be taken out of your Universal Credit payments. Different overpayments may be repaid from your Universal Credit payments at different times, and you may receive more than one letter.

If you claimed Tax Credits as a couple, the overpayments will be split equally between you and your partner.  If you want to find out how the overpayment has been worked out, contact HMRC:

  • Helpline – 0345 300 3900
  • You can also use NGT text relay if you cannot hear or speak on the phone: dial 18001 then 0345 300 3900

How much can be taken from your Universal Credit payments

Your Universal Credit payment is worked out at the end of each Assessment Period. Your Universal Credit online account will show a breakdown of each deduction taken from your Universal Credit payments.

The most that can be taken from your Universal Credit payments each month is 30 percent of your Universal Credit Standard Allowance (the basic amount of Universal Credit you are entitled to, before extra money for things like childcare and housing costs is added) unless Last Resort Deductions are being taken.  In this case, your deductions may be more than 30 percent of your Standard Allowance.

If you are part of a joint claim for Universal Credit, you and your partner will receive a joint Universal Credit payment for your household, paid twice a month. If you or your partner have debts or deductions, these will be taken from your Universal Credit payments before you get them.

Reducing your deductions because of financial hardship

If you do not have enough money to live on because of deductions from your Universal Credit payments, you can ask for a ‘financial hardship decision’ to reduce your deductions.

We will consider this if deductions are being taken from your Universal Credit payments for:

  • repaying Tax Credit overpayments
  • paying off benefit debt
  • repaying a Social Fund loan, or
  • paying off rent arrears.

If we decide to reduce your deductions, the new reduced deductions will apply from the start of your next Universal Credit Assessment Period.

When you are earning enough money again, your deductions will go back up to the normal amount.

Deductions that are taken first

If your total deductions would be more than 30 percent of your Universal Credit Standard Allowance, deductions will be made in the following order of priority:

  • Fraud penalties
  • Sanctions
  •  Universal Credit Advance after a new claim or change of circumstances
  •  Universal Credit Advance after transferring from another benefit
  •  Budgeting Advance

Any other deductions will be taken in the following order of priority.

  • Housing costs
  • Rent or service charges included in rent (at five percent of your Standard Allowance)
  • Fuel arrears (gas and /or electricity)
  • Rates arrears
  • Water charges arrears
  • Child maintenance
  • Social Fund loans
  • Hardship payments
  • Housing Benefit and Department for Communities administrative penalties
  • Housing Benefit, Tax Credit and Department for Communities Fraud overpayments
  • Housing Benefit, Tax Credit and Department for Communities normal overpayments
  • Integration Loan arrears

If a new debt is a higher priority than an existing one, we can stop one deduction and set up a new one.

What happens to your debts is you stop getting Universal Credit

If you no longer get Universal Credit payments, we will take action to get back any money you owe:

  • from other benefits or payments that you get, or
  • from your pay (by making ‘Direct Earnings Attachment’ deductions).

We can use debt-collection agencies to get this money back.

You may prefer to contact Debt Management to pay back any money you owe.

Who you can talk to about debts

Universal Credit overpayments

To discuss a Universal Credit overpayment, or to dispute or appeal against our decision, contact us through your Universal Credit online account or speak to your Work Coach in your local Jobs & Benefits office.

To find out how much you owe due to a Universal Credit overpayment, to make a repayment, or discuss reducing your repayments, contact Debt Management.

Universal Credit advance

To get information about delaying repayments for your Universal Credit Advance, to dispute our decision about your Advance, or discuss your repayments, contact us through your Universal Credit online account or phone the Universal Credit Service Centre

To make a repayment, contact Debt Management.

You can check the balance of your Universal Credit Advance through your Universal Credit online account.

Hardship payment

For information about Hardship payments, or to dispute or appeal against our decision about a Hardship payment, contact us through your Universal Credit online account or speak to your Work Coach in your local Jobs & Benefits office.

To make a repayment, contact Debt Management.

Third party deductions

For information about a Third Party Deduction, or to dispute or appeal against our decision, contact us through your Universal Credit online account or phone the Universal Credit Service Centre

If you have made some payments direct to the third party supplier, you can contact them to discuss the money you owe or to make a repayment. Their contact details will be on their most recent bills or on their website.

Benefit overpayments

For information on benefit overpayments, to dispute or appeal against a decision, to make a repayment, or to discuss reducing your repayments, contact Debt Management.

Housing benefit

For information on Housing Benefit overpayments, or to dispute or appeal against a decision, contact Northern Ireland Housing Executive (if you are a tenant) or Land & Property Services (if you are a homeowner).

To make a repayment or to discuss reducing your repayments, contact Debt Management.

Discretionary support and short-term benefit advance

For information on Discretionary Support or Short-term Benefit Advance overpayments, or to dispute or appeal against our decision, contact Finance Support Service

Budgeting loan

For information on Budgeting Loan repayments, or to dispute a decision, write to Lisburn Jobs & Benefits office.

To make a repayment or discuss reducing your repayments, contact Debt Management.

Tax credits

For information on Tax Credits overpayments, or to dispute or appeal against a decision, contact HMRC.

To make a repayment or discuss reducing your repayments, contact Debt Management.

Help and support

If you want help or advice about your debts and paying them off, contact your Work Coach through your Universal Credit online account or phone the Universal Credit Service Centre.

If you would like independent help and advice on Universal Credit or any of the other welfare changes, you can visit any independent advice office or contact:

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