Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, how many universal credit claims are subject to deductions for tax credit overpayments; and how many of those deductions are related to the cross over period between tax credit claims ending and universal credit claims starting.

The latest available data, for March 2020, shows around 15% of all Universal Credit claims had a deduction for Tax Credit Overpayments.

We do not capture data on how many of the deductions taken from Universal Credit are due to the cross over period between tax credit claims ending and Universal Credit claims starting.

When a claim for Universal Credit is made and it has been established that the customer meets the basic entitlement conditions, DWP automatically instructs HMRC to end the Tax Credit award with effect from the day before the Universal Credit claim was made. Delays in ending Tax Credits are therefore minimal once the basic entitlement conditions of Universal Credit have been established.

When a Tax Credit claim comes to an end and the claimant makes a new claim to Universal Credit, any outstanding Tax Credit overpayments are transferred to DWP. HMRC will inform the claimant prior to transfer and provide details of the debt to be transferred.

Once transferred, the claimant is notified via their online Universal Credit journal about the rate of deduction in respect of Tax Credits debt. Where a claimant is in financial hardship they can contact DWP Debt Management to discuss and agree a sustainable rate of repayment.

From 3rd April 2020, other deductions, including Tax Credit overpayments, were suspended for three months due to Covid-19, resulting in none of these deductions being taken during May and June 2020.