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DWP Defends Aggressive Overpayment Recoveries as MPs Advance New Debt Powers

The department is citing a 15% deduction cap alongside Breathing Space protections as Parliament nears passage of a bill granting new recovery powers.

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Some people have universal credit payments clawed back (Photo: John Lamb/Getty)
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Overview

  • A report from the Money and Mental Health Policy Institute finds that 1.1 million Universal Credit claimants face 15% deductions within weeks after undetected overpayments accumulate.
  • The DWP highlights its new Fair Repayment Rate, capping benefit repayments at 15% of the standard allowance to limit income shocks for 1.2 million households.
  • Claimants describe losing about £60 a month to clawbacks, leaving some unable to afford food and exacerbating existing mental health conditions.
  • The Public Authorities (Fraud, Error and Recovery) Bill is set to give the DWP powers to access bank transactions and deduct debts even after benefit entitlement ends.
  • Campaigners urge the DWP to introduce mandatory affordability checks and negotiate realistic repayment plans in line with consumer-creditor standards.