answer text |
<p>The Department 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 per cent of the Universal Credit standard allowance, and
from October 2019 this will be reduced to 30 per cent.</p><p> </p><p>The average advance
amount for new claims is around £400, which can be repaid over a period of 12 months,
at a rate of £33.33 per month. Therefore, in the majority of cases, advance payment
recovery is small in comparison to the whole Universal Credit award, with a current
average award of £658 per month.</p><p> </p><p>We recognise that exceptional circumstances
may occur to claimants that were not foreseen when the advance was taken out. Help
is available for those struggling to meet the recovery rate once recovery begins and
if the claimant is facing unexpected financial hardship they can ask the Department
for a deferral of the repayment of any advance they have taken out. The deferral periods
are up to 3 months for a new claim, benefit transfer or change of circumstances advance
and up to 6 months for a Budgeting advance.</p><p> </p><p>Where a claimant has a reduction
in benefit due to a Fraud Penalty or Conditionally Sanction that equals or exceeds
40% of their Universal Credit standard allowance then no advance repayment will be
taken. If there is insufficient Universal Credit in payment due to reductions such
as earnings, other income and capital yield to take the full amount of advances repayment,
a lesser amount will be taken.</p>
|
|