Universal Credit: Overpayments

(asked on 14th July 2021) - View Source

Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what steps she is taking to prevent (a) universal credit overpayments and (b) the subsequent debt caused by those overpayments.


Answered by
Will Quince Portrait
Will Quince
This question was answered on 21st July 2021

DWP recognises that stopping fraud and error before is happens and preventing debt is the best approach, both for Government and claimants alike, and it should be noted that, during a period when we have faced the unprecedented challenges posed by COVID-19, fraud and error in the benefits system remains low, with 95% of benefits, worth more than £200 billion, paid correctly in 2020/21.

We continue to invest in fraud and error prevention, with the Chancellor announcing £44m at the Spring Budget to support the expansion of both our Integrated Risk and Intelligence Service and our new Enhanced Checking Service and the development of Transaction Risking as a means of identifying high risk claims.

Our Annual Report and Accounts published 15 July 2021 provides more information on what we are doing to prevent overpayments occurring – https://www.gov.uk/government/publications/dwp-annual-report-and-accounts-2020-to-2021

Where an overpayment does occur, the Department has a responsibility to recover the money without creating undue financial hardship. In Universal Credit, all overpayments are recoverable. Where recovery is made by deduction from Universal Credit, there is a limit placed on the overall amount that can be deducted. Formerly 40% of the Universal Credit Standard Allowance, this was reduced from 30% to 25% in April 2021.

Where requested deductions exceed the 25% maximum, or there is insufficient Universal Credit in payment for all deductions to be made, a priority order is applied, which determines the order in which items should be deducted. ‘Last resort’ deductions, such as rent or fuel costs, are at the top of the priority order, ensuring that claimant welfare is prioritised, followed by social obligation deductions, such as fines and child maintenance, and finally benefit debt, such as Social Fund loans and benefit overpayments.

Anyone with overpayment deductions who does experience financial hardship is encouraged to contact the Department’s Debt Management unit. Where a person cannot afford the proposed rate of these deductions repayment a lower amount can be negotiated.

DWP is also committed to HM Treasury’s Breathing Space policy, which provides citizens with problem debt the right to legal protections from creditor action for a period of time in order to enable them to receive debt advice and enter into an appropriate debt solution.

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