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Deduction Priority Order
Contents
Introduction
Deductions taken before the priority order is applied
Deductions priority order
Introduction
There is a priority order for deductions in Universal Credit. However, it will only
be applied if there is insufficient Universal Credit in payment to make all the
deductions needed or if the total deductions would otherwise exceed 30% of the
benefit unit’s Universal Credit Standard Allowance.
Deductions taken before the priority order is applied
The following deductions are taken before the priority order is applied (in order of
precedence)
1 Fraud Penalties.
2 Conditionality Sanctions.
3 Short term Advance (Universal Credit Advance (New claim or Change of
Circs).
4 First Month Advance (Universal Credit Advance (Benefit Transfer)).
5 Budgeting Advance.
Only one conditionality sanction or one fraud penalty can be applied to a claimant
at any one time. However, both members of a couple can have a sanction /
penalty applied.
If a conditionality sanction is in place, and a fraud penalty needs to be applied to
the claimant’s Universal Credit, the fraud penalty will take precedence. The
conditionality sanction will be applied once the fraud penalty has ceased.
If a fraud penalty or conditionality sanction is being applied, an Advance cannot
be recovered at the same time. The penalty / sanction will take precedence. The
Advance will be recovered once the penalty / sanction has ceased. See
Sanctions
If a penalty/sanction is only applied to part of the assessment period (for
example, 2 days of the assessment period and the deduction totals less than
30% of the Universal Credit Standard Allowance) then other deductions can be
taken up to the 30% maximum.
If a claimant / benefit unit has more than one Advance outstanding, the priority
order for Advances must be applied.
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Deductions priority order
Deductions are taken in the following order of precedence:
Last resort deductions
No 6- owner-occupier service charges arrears (where the lender is not part of
Mortgage Interest Direct (MID) scheme).
No 7 – Rent and/or service charges arrears (minimum deduction rate of 10%).
No 8- gas arrears (electricity arrears can come above gas arrears, if needed)
No 9- electricity arrears.
Enforcing social obligation deductions
No 10- Council Tax or Community Charge arrears.
No 11- fines or Compensation Orders (minimum deduction rate)
No 12- water charges arrears
No 13- old scheme Child Maintenance
No 14- Flat Rate Maintenance
Ensuring recovery of benefit debt deductions
No 15- Social Fund loans
No 16- Recoverable Hardship Payments
No 17- Housing Benefit and DWP Administrative Penalties.
No 18 – Housing Benefit, Tax Credit and DWP Fraud overpayments
No 19- Housing Benefit and DWP Civil Penalties
No 20- Housing Benefit, Tax Credit and DWP normal overpayments
Enforcing social obligation deductions
No 21- Integration Loan arrears
No 22- Eligible Loan arrears
No 23- rent and / or service charges arrears (maximum deduction rate of no
less than 10% and no more than 20%)
No 24 – fines or Compensation Orders (maximum deduction rate)
Universal Credit systems will be able to stop one deduction and implement
another during the claim if the new debt is higher up the priority order than the
recovery being deducted.
Only one deduction for fines can be taken at any one time, any further requests
cannot be accepted until the first is complete.
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