Debts taken from Universal Credit: the 15% cap and how to get deductions reduced

Deductions are now a normal part of Universal Credit for millions of people. DWP figures show that in May 2026, around 3.3 million Universal Credit households (47%) had at least one deduction, and the average was £53 that month. Around 21% of households had deductions at the 15% cap. Here’s how the rules work and what you can do if the money left over isn’t enough to live on.

What’s changed: the Fair Repayment Rate

The government introduced the Fair Repayment Rate on 30 April 2025. It cut the overall cap on most deductions from 25% to 15% of your Universal Credit standard allowance. It applies to assessment periods starting on or after that date. The government said around 1.2 million households would keep an average of £420 a year more.

The cap is based on your standard allowance, not your whole award. So extra amounts for children, housing or disability don’t raise the limit.

Which deductions count towards the cap?

The DWP calls rent arrears, energy arrears and child maintenance last resort deductions. They can take you above 15% to help prevent eviction, stop your energy being cut off, or make sure child maintenance is paid.

Sanctions and fraud penalties work differently. The DWP treats them as reductions to your Universal Credit award, not as debt deductions.

What happens when you hit the cap

Deductions follow a set priority order. If a deduction would take the total over 15%, it isn’t taken yet. It waits until there’s room under the cap. So a new deduction, such as one for council tax, may not start straight away if other deductions already take you to 15%.

Council tax arrears and court fines

These are third-party deductions: the DWP pays the money to someone else. GOV.UK says the DWP will only agree to them if the organisation has tried other ways to get the money from you. For Universal Credit, each debt is usually taken at 5% of your standard allowance. Rent or service charge arrears are taken at between 10% and 15%.

• Council tax: the council needs a liability order before it can ask. Read council tax arrears taken from benefits.
• Court fines: the court can arrange deductions from your benefit, and you can ask for this yourself if it’s more affordable. Read can’t pay a magistrates’ court fine?

You should be told by letter or in your Universal Credit journal how much will be taken. Your monthly statement also shows each deduction.

How to ask for deductions to be reduced

GOV.UK says you can ask for a financial hardship decision to lower what you repay. It may be considered if money is taken from your Universal Credit for:

• benefit debt, such as an overpayment
• Budgeting Loan or Crisis Loan repayments
• advances
• rent arrears taken at more than 10% of your standard allowance

If it’s agreed, the lower amount starts from your next assessment period.

For benefit debts, contact DWP Debt Management. GOV.UK says it can talk you through your options, including what you can afford to pay. Have your income, spending and other debts to hand.

Council tax and court fine deductions aren’t on the hardship list. Contact the council or the court fines office directly and explain your situation. Make sure you’re getting Council Tax Reduction too.

Debt solutions and benefit debts

If deductions are one part of a wider debt problem, a formal solution may help.

• Debt Relief Order: benefit overpayments that didn’t arise from fraud can usually be included, and so can council tax arrears. Once a DRO is made, the creditors named in it can’t take action to collect those debts. Read our DRO guide or try the DRO checker.
• Debts a DRO can’t include: magistrates’ court fines and child maintenance carry on being collected. Read what debts can be included in a DRO?

An adviser can check which of your benefit debts would be included and what that means for your deductions. Free help is available from MoneyHelper and debt charities.

Frequently asked questions

How much can be taken from my Universal Credit for debts?

For most debts, the total is capped at 15% of your standard allowance. Last resort deductions for rent arrears, energy arrears and child maintenance can take it higher.

Do council tax and fine deductions count towards the 15% cap?

Yes. If you’re already at the cap, they wait in the queue until there’s room.

Can I stop deductions completely?

Not usually. You can ask for a financial hardship decision to reduce some deductions, or speak to the organisation you owe about a different arrangement.

Are sanctions included in the 15% cap?

Sanctions aren’t debt deductions. The DWP treats sanctions and fraud penalties as reductions to your award, so they’re handled separately from the cap.

Sources

• GOV.UK, Find out about money taken off your Universal Credit payment
• GOV.UK, Universal Credit change brings £420 boost to over a million households
• DWP, Universal Credit deductions statistics June 2025 to May 2026
• GOV.UK, Manage deductions from your benefits to pay debts and bills
• GOV.UK, Benefit overpayments: how to make a repayment