Another Lincolnshire Highlights news story…
Universal Credit claimants could soon be receiving a higher amount each month – but the change is only affecting a certain number of people.
A change is coming to do with the way that advance payments are recovered.
It can take five weeks, sometimes longer, for the first payout of the benefit to come through.
One way around this is to get an advance – this is like an upfront interest-free loan of some or all of your first expected payment which you must then pay back from subsequent UC deposits in your account.
And while there have been calls for the advances to be written off as non-repayable grants, that hasn’t happened yet.
So what it means is that deductions are taken from your Universal Credit over the following 12 months as the DWP claws back the advance.
But a change is coming from October 2019.
How much can be deducted?
The maximum amount that can be deducted from Universal Credit is 40 per cent of the claimant’s standard allowance.
There are two exceptions:
- Deductions for normal consumption of utilities do not count towards the 40 per cent maximum
- If a sanction or penalty is being applied, or if an advance is being recovered, priority deductions i.e. housing and fuel costs are still taken even if the total amount of deductions is higher than the 40 per cent
A maximum of three third party deductions are taken at any given time and if the claimant is not getting enough Universal Credit to cover the deductions, then a priority order is applied.
So how is this changing?
The good news for claimants who are struggling with the deductions is that from October 2019 this maximum will be reduced to 30 per cent, following pressure from campaigners.
So your deductions will be 10 per cent lower, meaning you actually receive more Universal Credit a month.
Those who do not have any deductions in place obviously will not be affected and their payments remain the same.
In addition, the period over which advances can be recovered will be extended from 12 to 16 months, from October 2021.
How many people will be affected?
This cut in the maximum deduction is going to affect a lot of people.
Figures have shown that more than half (53 per cent) of Universal Credit claimants have had their payments cut
The statistics revealed that 532,000 Universal Credit claimants had some of their payments deducted in October 2018.
Six thousand claimants had reductions of 40 per cent of their allowance or more, while 129,000 claimants had deductions of between 31 and 40 per cent.
So, based on those figures from a year ago, this indicates that around 135,000 people – everyone whose deductions are over 30 per cent – could see their benefits get a boost as the UC cuts drop.
And with the increasing numbers switching across to Universal Credit, the number affected is likely to be far higher.
October’s statistics showed a sharp rise in deductions compared to figures obtained by FOI in August 2018 by The Guardian, which revealed one-third of claimants at that time saw money deducted from their payments.
In May 2017, just one in 10 claimants had their payments deducted.