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Deductions: Causing Hardship?

Where a deduction (or number of deductions) means the claimant is left without enough money to live on, then they can ask for the deduction to be reduced.

They will need to show the DWP that the deduction/s is/are causing them financial hardship.

They will probably be asked to give a financial statement which explains why they can't meet their basic living costs with the current rate of deduction/s in place.
 
Where the deduction is in respect of a social security, tax credit or HB overpayment, or an outstanding social fund or budgeting loan, then the claimant can call the DWP's Debt Management team to see if they will reduce the level of deduction in place (Telephone: 0800 916 0647).

Where the deduction is to a third party (eg for council tax arrears or rent arrears) the amount being taken can be reduced (although for rent arrears it appears that this cannot go below an amount equal to 10% of the claimant's standard allowance).

More on Third Party Deductions for rent arrears on this page.

What if the claimant gets the deduction rate reduced ?  Won't other creditors "sneak in" so the total deduction goes back up to 40% and they're no better off?

We don't think this should happen as the DWP replied to our FOI 2564 to say:

"the UC department should apply a new reduced overall maximum deduction rate in line with any decision to reduce the individual debt".

If they do they can use this standard letter - UCTPD3  - to challenge this.



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