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<p>The Government recognises the importance of safeguarding the welfare of claimants
who have incurred debt. Universal Credit already has procedures and regulations in
place to protect claimants from excessive deductions. The maximum rate of deductions
cannot normally exceed 40% of the Universal Credit standard allowance, and from October
2019, this will be reduced to 30% of a claimant’s standard allowance of their UC award.
If a claimant is in financial difficulty as a result of the level of deductions being
made they can contact the Department to request that a reduction in deductions be
considered.</p><p> </p><p>Universal Credit (UC) new claim advances provide access
to a payment for those in financial need, which can be accessed on the same day, until
their first UC payment is due. Claimants can access up to 100% of the total expected
monthly award, for which they can pay back over a period of up to 12 months, and in
the Autumn Budget 2018, we announced that from October 2021, the payback period for
these advances will be extended further, up to 16 months.</p><p> </p><p>Currently
there are around 850,000 claimants that have a UC advance repayment in place. Of these
claimants, the table below shows 440,000 also have at least one other debt relating
to benefit overpayments, social fund loans or previous advances (figures rounded to
nearest ten thousand). The data held by the Department does not include other third
party debts, for example arrears, utility bills or other borrowing. However, research
conducted by Almo’s shows that while many people join UC with pre-existing arears,
this fell by a third after 4 months on universal credit.</p><p> </p><p> </p><table><tbody><tr><td><p>Debt
Source/Combination</p></td><td><p>Volume</p></td><td><p>Percent</p></td></tr><tr><td><p>Tax
Credits only</p></td><td><p>120,000</p></td><td><p>27.31</p></td></tr><tr><td><p>Social
Fund only</p></td><td><p>80,000</p></td><td><p>18.29</p></td></tr><tr><td><p>Other
Combinations inc Social Fund</p></td><td><p>62,000</p></td><td><p>14.04</p></td></tr><tr><td><p>Other
Combinations</p></td><td><p>40,000</p></td><td><p>9.05</p></td></tr><tr><td><p>UC
Overpayment only</p></td><td><p>22,000</p></td><td><p>4.94</p></td></tr><tr><td><p>Other
Combinations inc UC</p></td><td><p>20,000</p></td><td><p>4.49</p></td></tr><tr><td><p>Other
Combinations inc Leg OP & SF</p></td><td><p>18,000</p></td><td><p>4.05</p></td></tr><tr><td><p>Legacy
Benefit overpayment only</p></td><td><p>18,000</p></td><td><p>4.04</p></td></tr><tr><td><p>Other
Combinations inc Legacy</p></td><td><p>17,000</p></td><td><p>3.89</p></td></tr><tr><td><p>UC
Recoverable Hardship Payment</p></td><td><p>10,000</p></td><td><p>2.39</p></td></tr><tr><td><p>Legacy
Benefit overpayment and Social Fund</p></td><td><p>10,000</p></td><td><p>2.22</p></td></tr><tr><td><p>Housing
Benefit only</p></td><td><p>10,000</p></td><td><p>2.20</p></td></tr><tr><td><p>Tax
Credits & Housing Benefit</p></td><td><p>9,000</p></td><td><p>2.05</p></td></tr><tr><td><p>Housing
Benefit & Social Fund</p></td><td><p>5,000</p></td><td><p>1.03</p></td></tr></tbody></table><p>Source:
DWP internal statistics</p><p> </p><p>Notes:</p><p> </p><p>1. Data has been sourced
from DWP internal statistics.</p><p>2. The figures within the data table for those
with more than two types of benefit debt have been combined and reported according
to whether they have both a legacy benefit (LegOP) and a social fund (SF) debt, either
of these singularly or another UC related debt.</p>
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