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Universal Credit explained: 6 explanation why your payments may very well be stopped or reduced | Personal Finance | Finance


As the price of living crisis continues and inflation sits at nine percent, any changes to payments may very well be crucial to families on low incomes. Over six million households within the UK claim Universal Credit so it’s vital for people to know why their money may very well be reduced or stopped.

How much people can claim may be complicated to work out, because it relies on individual circumstances.

This includes the whole lot out of your living arrangements, employment status and any income and savings they’ve.

These circumstances are then assessed every month, which suggests Universal Credit payments can change every month. Some months people may get more, or less.

There are some very specific explanation why someone’s money may very well be reduced or temporarily stopped – and it is vital persons are aware of those so that they can plan for any changes of their payments.

READ MORE: Britons could get extra money outside of £150 council tax rebate – are you eligible?

These reasons are:

  • You’ve earned more cash from work

For each £1 one may earn, their Universal payment reduces by 55p – that is often called the taper rate.

The more someone earns from their work, the less Universal Credit they are going to receive.

  • You’ve reported a change in circumstances

If someone moves homes, or gets a recent job or they’ve inherited any money, it will be significant to let Universal Credit know of any changes as soon as possible so that they will not be overpaid or underpaid.


A full list of what counts as a change in circumstance is offered on the gov.uk website.

  • You owe Universal Credit money

If someone has taken out an advance payment, hardship payment or budgeting advance, then it will come out of their future Universal Credit payments.

That is because these are all technically loans, so that they must be paid back.

  • You’ve been sanctioned by the DWP

To assert Universal Credit, people might want to agree to finish various tasks similar to searching for work and attending JobCentre interviews.

  • You’ve been paid an excessive amount of Universal Credit

The DWP will reduce any future Universal Credit payments in the event that they consider they’ve overpaid someone.

People can report an overpayment by signing into their Universal Credit account or calling the Universal Credit helpline.

  • You’re paying back debt

People may get a “third party deduction” applied to their Universal Credit in the event that they are in debt to another person.

People will only get a deduction if the creditor asks the DWP. The dedication will likely be five percent of 1’s basic standard allowance, even though it may very well be more.

Deductions can only be made for:
– Rent arrears and other housing costs like service charges – the deduction may be between 10 percent and 20 percent for rent arrears
– Gas, electric or water arrears
– Council tax bills arrears
– Child support maintenance
– Some loans
– Some fines.

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