Five reasons why your Universal Credit could be cut or stopped – how to avoid them

Universal Credit is a payment by the Department for Work and Pensions (DWP) for people who are on a low income or out of work.

The payment includes support for the cost of housing, children and childcare, and financial support for people with disabilities, carers and people too ill to work.

How much you can claim is dependent on your personal circumstances such as your living arrangements or your employment status and these are assessed each month by the DWP.

Sometimes, your payment may be reduced or even temporarily stopped due to specific reasons and it is important that you are aware of these.

We explain five reasons why your Universal Credit could be temporary paused or stopped altogether.

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Your earnings have increased

If you’re employed, your Universal Credit can be affected and reduced depending on how much you earnings.

As your income increases, your monthly payment for Universal Credit can get reduce until you are earning enough to no longer need the financial support.

Under what's called the "taper rate" for every £1 you earn your payment reduces by 55p.

Once you earn too much your claim will close but you should be informed about this before it happens.

If your circumstances change within six months of your last Universal Credit claim, then you can reapply.

Some people are able to earn more money while on Universal Credit due to the "work allowance".

This is a set amount you can earn before your benefits start to be reduced.

You will qualify for the work allowance if:

• You are responsible for a child or young person
• You have a disability or health condition that affects your ability to work

If you get help with housing costs, your work allowance is currently £344, or if you don’t get help, the work allowance is £573.

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You've reported a change in circumstances

The DWP pays Universal Credit is based on your personal circumstances.

So if certain changes happen in your life, then you will need to report them to the DWP as it might affect how much you can claim.

Not all changes in circumstances will result in your Universal Credit is reduced – some may actually increase your payments.

If you don't report the change straight away, your claim might be reduced or stopped.

If you give incorrect information, and if you deliberately don’t report changes, you are committing benefit fraud.

Changes listed online that Universal Credit expects you to tell it about include:

• Finding or finishing a job
• Having a child
• Moving in with your partner
• Starting to care for a child or disabled person
• Changing your mobile number or email address
• Moving to a new address
• Changing your bank details
• Your rent going up or down
• Changes to your health condition
• Becoming too ill to work or meet your work coach
• Changes to your earnings (only if you’re self-employed)
• Changes to your savings, investments and how much money you have
• Changes to your immigration status, if you’re not a British citizen

You can report a change of circumstances by signing in to your Universal Credit account.

You've had an overpayment

If the DWP has paid you too much Universal Credit, the department will take back the money from your future payments.

If you do not tell the DWP about the overpayment you may be prosecuted for benefit fraud or have to pay a penalty if you do not tell benefit providers about overpayments

You can report an overpayment by signing into your Universal Credit account or calling the Universal Credit helpline.

You can try asking the DWP if they will let you not pay back the overpayment.

This is called "exercising their discretion not to recover an overpayment" but they don't have to agree to this.

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You've been sanctioned

To get Universal Credit payments, you’ll need to accept an agreement called a "claimant commitment".

This is a list of things you promise to do to get the payments.

By agreeing, it means you prepare for and look for work if you aren't working and will increase your earnings if you are already working.

If you are not showing that you are doing this by recording your job searches, or your Jobcentre work coach doesn't feel you are doing enough to get back into work, then you could be sanctioned.

Getting a sanction means your Universal Credit payment will be temporarily reduced and you will be notified of it if it happens.

This will be in a letter or, if you use the digital service, posted on your Universal Credit online account and will tell you:

• why you’ve received a sanction
• the level of sanction you’ve been given
• how long the sanction will last
• how much money will be taken away from your Universal Credit payment
• the date the sanction decision was made

There are different sanctions depending on which "conditionality group" you’re in and these groups just highlight what work-related activities you have to do in order to get a full entitlement to Universal Credit.

There are four levels for a sanction from higher to lowest, and the sanctions can last from seven days right up to 182 days.

You owe the DWP money from a loan

If you've taken out an advance payment, hardship payment or budgeting advance, then this will come out of your future Universal Credit payments.

That's because these are all technically loans, so they need to be paid back to the DWP.

Advance payment is money awarded to new claimants to help them cover their bills while they wait for their application to go through.

A budgeting advance is one-off payment for things like home repairs or uniform for a new job.

A hardship payment is given to those who've been sanctioned and are struggling with their lower Universal Credit payment.

How long you'll have to pay back these payments for depends on how much you borrowed.

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