What to do if your Universal Credit payment has been reduced or stopped?
Your Universal Credit payment is determined by several factors and therefore, can change. We explain what to do if your Universal Credit payment has been reduced or stopped.
If your Universal Credit payment has changed, you will either receive a letter or a message when you next log into your online Universal Credit account.
There are several reasons your Universal Credit payment may be reduced, such as:
- You've reported a change in circumstances which means you now receive less Universal Credit.
- You have received a Universal Credit sanction.
- You have earned more money at work - discover how working affects your Universal Credit.
- You are paying back an advanced payment, hardship payment or budgeting advance.
- You are repaying an overpayment automatically by the Jobcentre or HMRC.
- You are repaying a creditor you are in debt to, and they have applied for the money to come out of your Universal Credit automatically - this is called a third-party deduction.
What happens if my Universal Credit is used to pay off my third-party debts?
You will receive a Universal Credit deduction if the creditor asks the DWP for a third-party deduction. The DWP will inform you either by letter or through your online journal.
Your Universal Credit basic standard allowance will be reduced by 5% for most third-party deductions. However, more money can be deducted for specific debts such as rent arrears.
You can only receive a third-party deduction for Universal Credit for the following debts:
- Gas, electric or water arrears.
- Council tax arrears.
- Child support maintenance.
- Rent arrears (this can be 10-20% of your basic standard allowance of Universal Credit).
- Service charges.
You can only receive a maximum of three third-party deductions at once, and it's unlikely that more than a combined 30% can be deducted from your basic standard allowance.
If you are struggling to meet your basic needs because of a deduction you should speak to a welfare benefits advisor as there may be other ways for you to get financial help, budget your money better, or they can ask the DWP to restructure your payments.
What happens if you receive an overpayment?
If you have received an overpayment of Universal Credit, or you received too much Tax Credit, the DWP will reduce your monthly payment by between 15% and 25% of your standard allowance until you have repaid the amount.
You can also have a reduction if your overpayment was a result of fraud. The DWP will take a maximum of 30% of your basic standard allowance.
If you are struggling to meet your basic needs because of an overpayment deduction, you should speak to a welfare benefits advisor.
They may be able to help you with other ways for you to get financial help, budget your money better, or ask the DWP to reduce the rate of repayments.
Coronavirus and Universal Credit overpayments
If you were repaying money for a UC overpayment
The DWP temporarily stopped making UC claimants pay back any overpayments in 2020. They have now started taking the money back from overpayments that were made.
When will this happen?
If your repayments were stopped, the DWP will write to you or add a journal entry in your online account to let you know when your repayments will start again.
If you are struggling to pay your essential living costs (rent, food, council tax etc.), you should contact the DWP’s Debt Management contact centre on:
Freephone: 0800 916 0647
Textphone: 0800 916 0651
What to do if you are struggling financially because of a Universal Credit deduction
If you are struggling financially because of a Universal Credit deduction, you can request the DWP take a smaller deduction.
You will need to explain to the DWP how you don't have enough money to meet your basic needs - also known as financial hardship.
The DWP will ask to see a financial statement showing your income and how you spend your money. This will need to highlight that you can't make your basic living costs with the current rate of reduction applied to you.
You can provide the information the DWP requires through your Universal Credit online journal or in a letter.
What to do if you think your Universal Credit payment is wrong
If you believe your Universal Credit payment is incorrect, you should call the Universal Credit helpline or request for an explanation through your online account.
If possible, you should provide evidence of the DWPs mistake by letter or through your online journal.
What to do If you disagree with your Universal Credit deduction
If the DWP replies with their reasoning, and you still disagree with their decision, you can challenge the Universal Credit payment deduction through mandatory reconsideration.
- Introduction to Universal Credit
How will moving to Universal Credit affect you
- What benefits is Universal Credit replacing?
- How will Universal Credit affect Child Tax Credits?
- How will Universal Credit affect Working Tax Credits?
- How will Universal Credit affect my Income Support?
- How will Universal Credit affect my ESA?
- How will Universal credit affect Housing Benefit?
- How will Universal Credit affect Council Tax?
Help with your Universal Credit claim
- How to apply for Universal Credit
- How to fill in your Universal Credit application form
- How to reapply for Universal Credit
- What is the Universal Credit Claimant Commitment?
- How to claim Universal credit with a mental health condition
- How to prepare for your Universal Credit Work Capability Assessment
- How to claim Universal Credit when working
- How to claim Universal Credit when self employed
- How to claim Universal Credit as a student?
- Help if you already claim Universal Credit
- Universal Credit sanctions
- Challenging a Universal Credit decision
- Universal Credit resources