Millions on Universal Credit warned DWP will make deduction of up to £756

A warning has been issued to millions on Universal Credit who face deductions from the Department for Work and Pensions of up to £756 a year. DWP Universal Credit claimants are at risk of losing HUNDREDS of pounds from payments.

The DWP is clawing back £1 for every £13 paid, research this week from the New Economic Foundation found. Conor Lawlor, benefits expert at Turn2us, says: "These debts can accrue in several ways, including for Universal Credit and other benefit overpayments (even if the overpayment was made in error by DWP), benefit advances and recovering hardship payments.

"The DWP can also deduct on behalf of third parties if a claimant is in debt to them, including for rent and service charge arrears, council tax arrears, court fines, child maintenance, and for utilities like electricity, gas and water."

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730,000 households (16%) lost money to pay back an advance from the DWP to cover the five-week wait to receive the first UC payment. 910,000 households (20%) lost money to pay back a budgetary advance from the DWP to meet emergency costs.

640,000 households (14%) lost money to pay back tax credits previously erroneously overpaid by HMRC. You can use the Turn2Us Benefits Calculator to see exactly how much will be deducted from your Universal Credit because of your earnings. Universal Credit is calculated based on your net earnings.

This means your earnings after deductions for tax, national insurance and pension deductions. 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.

A financial hardship decision will be considered if deductions are being taken from your Universal Credit payments for repaying Tax Credit over-payments, paying off benefit debt or repaying a Social Fund loan.

If a decision is made to reduce your deductions, the new reduced deductions will apply from the start of your next Universal Credit assessment period.