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last mo.

Charities Urge DWP to Mirror Consumer-Grade Repayment Standards for Universal Credit Overpayments

Advocates warn that more than a million claimants face abrupt 15% deductions under the Fair Repayment Rate without clear warning.

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Overview

  • Research from the Money and Mental Health Policy Institute shows the DWP can claw back up to £60 a month by deducting 15% of Universal Credit payments within weeks of an overpayment being identified.
  • Analysts highlight that commercial creditors must obtain court orders and negotiate affordable plans over months, whereas the DWP imposes swift deductions with minimal debtor engagement.
  • An estimated 1.1 million people across the UK currently owe Universal Credit overpayments, placing many low-income households under added financial pressure.
  • Campaigners say individuals with severe mental health conditions are disproportionately harmed by sudden benefit reductions that leave them unable to meet basic living costs.
  • A DWP spokesperson defends the Fair Repayment Rate cap and says the department offers support for affordable plans while planning to use the forthcoming Fraud, Error and Recovery Bill to prevent overpayments earlier.