Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, pursuant to the Answer of 8 April to Question 240478 on Universal Credit, what steps her Department is taking to monitor the (a) levels of debt and b) finances of claimants of universal credit that have received an advance payment.

We continue to evaluate Universal Credit as it is delivered. Research and analysis is conducted to assist and inform the evaluation and expansion of Universal Credit, focusing specifically on the effects of Universal Credit on claimants’ behaviours and outcomes. The Universal Credit Full Service Omnibus Survey was published in February 2019, which can be accessed here https://www.gov.uk/government/publications/universal-credit-full-service-omnibus-survey

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. 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.

At Autumn Budget 2018 we announced we will reduce the maximum rate at which deductions can be made from a Universal Credit award from 40% to 30% of the standard allowance, from October 2019. Additionally, from October 2021, the recovery period for advances will increase from 12 to 16 months. This will help over 600,000 families to manage their debts at any one point when roll-out is complete, providing them with, on average, £295 extra a year as their debts are repaid over a longer period.