Third Party Deductions (excluding rent arrears) will be deducted at an amount equivalent to 5% of the benefit unit’s Universal Credit Standard Allowance. This means couples will make higher third-party payments than single claimants The 5% is a flat rate and if the full 5% cannot be taken, no deduction will be made. This includes cases where the 5% deduction would take a claimant above
the overall maximum deduction rate of 25%.
Third party deductions are when money is taken off your Universal Credit to pay your debts for things including:
Utilities (like electricity, gas and water)
Rent service charges
Only 3 third party deductions can be taken at any one time.
Rent / service charges arrears
If your landlord informs Universal Credit that you have rent / service charges arrears, then an amount can be deducted per month from your ongoing Universal Credit payment until your balance is cleared. This is to prevent eviction.
There will be both a maximum and minimum deduction rate for rent arrears. The amount taken will vary depending on other deductions that are being made. A rent arrears deduction can be a maximum of 20% of the Standard Allowance or as low as 10% of the Standard Allowance if other deductions are being taken. The amount of no less than 10% and no more than 20% will be reduced pound for pound by any other deductions being made from the Universal Credit award. If there is insufficient Universal Credit in payment to take the full 10% minimum, nothing will be deducted.
The court can order that money is deducted from your Universal Credit payments if you have non-payment of a fine. Until May 2021 this was deducted at a rate of up to £108.35 per month. As of May 2021, the maximum amount that can now be taken is 5% of Standard Allowance.