BENEFITS claimants have been warned about a £4.35 rule that lets the Department for Work and Pensions (DWP) take their cash away.
If you have money, savings or investments between £6,000 and £16,000, DWP will reduce your Universal Credit (UC) payments.
For every £250 you’ve squirrelled away, it will take away £4.35 from the money you receive.
Any remaining amount under £250 will still be deducted £4.35.
The DWP gives an example of how this works on its website: “Sam has savings of £6,300. She has £300 of savings over the limit of £6,000. Her Universal Credit is reduced by 2 x £4.35 a month, that’s £8.70.
“Leeroy has savings of £14,500. He has £8,500 of savings over the limit of £6,000. His Universal Credit is reduced by 34 x £4.35 a month, that’s £147.90.
“Helen has savings of £17,000. She is not eligible for Universal Credit.”
The DWP warns people that they must accept and follow the rules in their claimant commitment.
If people don’t do things like attend appointments or accept job offers, they could miss out on over £400 a month.
The claimant commitment sets out what you must do to look for work, or increase your earnings if you’re already working.
The punishments for not following DWP’s rules are called sanctions.
In May 2025, 5.3% of UC claimants who could be subject to sanctions were being hit with penalties – roughly 111,300 people.
DWP dished out 611,820 sanctions between February 2024 and April 2025 – 550,000 for failing to attend appointments or do interviews.
If you’re single and under 25, or a joint claimant with one or both under 25, you’ll lose out on £10.30 a day for every day you’re sanctioned.
This goes down to £8.10 for under 25s and up to £13.10 for those who are single and over 25.
All sanctions are reduced by 40% for under 16 and 17-year-olds.
The severity of the sanctions – and how much money you miss out on – depends on how serious DWP says your actions have been.
Sanctions are separated into low, medium and high levels.
Low level sanctions could be for failing to attend appointments, not providing work related documentation or declining training courses or employment schemes.
But the sanction can be quickly lifted by doing whatever activity DWP has asked you to do.
Medium level sanctions kick in for reasons like failing to look for work and not being available for job interviews.
These last for four weeks – and 13 weeks if you’ve been sanctioned before.
High level sanctions can apply when you fail to accept a job without good reason, or leave a job due to misconduct.
These sanctions can last between three and six months.
A Jobcentre work coach or an employment scheme provider is the one who alerts DWP that a claimant may have failed to live up to expectations.
A decision maker will then weigh up the information and evidence presented to them, including the claimant’s reasons for failing to meet the requirements placed upon them.
If you disagree with a sanction decision, or have more evidence, you can request a review. This is known as a mandatory reconsideration.
You do this by putting a note in your journal in your Universal Credit account, over the phone, face to face or in writing.
Hardship payments may be available for some sanctioned claimants.
These are equivalent to about 60% of the UC standard allowance and must be paid back through UC.
The DWP says in an online statement: “When you claim Universal Credit you will need to accept your claimant commitment.
“Your claimant commitment will set out what you have agreed to do to prepare for and look for work, or to increase your earnings if you are already working. It will be based on your personal circumstances and will be reviewed and updated on an ongoing basis. Each time it is updated, you will need to accept a new claimant commitment to keep receiving Universal Credit.
“The claimant commitment is your record of the responsibilities that you have accepted in return for receiving Universal Credit, and the consequences of not meeting them.”
How much Universal Credit can you get?
TRYING to work out how much Universal Credit you can get can be overwhelming.
There are so many different elements that can affect your claim and it makes the whole process even more complicated.
There are several free calculators that you can use to help you get an estimate, such as Gov.UK, Citizen’s Advice, MoneySavingExpert, StepChange and Turn2Us.
You will need:
- Details of all your income, such as existing benefits, tax credits, earnings from employment and your pensions,
- Details of your partner’s income if you’re married, in a civil partnership or living with someone as a couple. You will be assessed as a couple
- Information on any savings you have,
- How much you pay in council tax per year, and whether you get any discounts, reductions or exemptions,
- Details of your rent or mortgage payments,
- Employment and income information about anyone else living with you, such as grown-up children,
- Details about your carer’s allowance if you receive it.
You’ll need to make sure that the information provided is as accurate as possible to get the truest estimate.
