Half a million claimants are now losing £229.50 a month through a combination of repaying debts and the £20-a-week cut to the vital benefit
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Millions claiming Universal Credit are seeing the benefit slashed to pay back debts including loans taken out to help them through the pandemic.
In another devastating blow to the UK’s poorest it can be revealed that at least one in three claimants are seeing big deductions to the controversial benefit payment.
The deductions are on top of the controversial £20 reduction in universal credit payments which the Government pushed ahead with last month in the face of fierce opposition.
Half a million claimants are now losing £229.50 a month because of the Government cut and repaying the debts.
Figures uncovered by Labour ’s Jonathan Reynolds, the shadow Work and Pension secretary, show that in June last year there were zero deductions to on Universal Credit to pay Government debt, but by May this year it had risen to more than 1.1 million.
Government debt includes repayments for social fund loans, hardship payments, integration loans as well as benefit overpayments, tax credit overpayments or housing benefit overpayments.
But as well as Government debt an average of 1.57 million, or a third of all 4.73 million claimants, are also being hit with deductions for advance payments given to them while they waited for their Universal Credit payment to come through.
When the benefit was introduced claimants moving to it had to wait for up to six weeks before their first payment was made and were given advances which had to be repaid.
More than 500,000 claimants are seeing their benefits slashed by the maximum 25% allowed which works out at £149.50 a month. Combined with the £20 a week cut it means that many are losing up to £229.50 a month.
Jonathan Reynolds said: “Families are facing a very difficult winter because of this Conservative government’s cuts to Universal Credit, tax hikes and a cost of living crisis.
“To place further strain on families through deductions is cruel, particularly when they have largely been forced on people by the Government, through their five-week wait policy or from their own errors in tax credit overpayments.
“Labour would replace Universal Credit with a system that offers genuine security for all, tackle the cost of living crisis through a VAT cut on energy bills to ease the burden on families this winter.”
Helen Barnard, Associate Director of the Joseph Rowntree Foundation, said: “It is totally unacceptable that levels of social security have been cut so low that many people are unable to afford essentials and keep up with their bills. This is made even worse by the Government piling further financial pressure on families with unaffordable debt repayments.
“The Government urgently needs to restore social security to adequate levels, particularly for families out of work whose main rate of support is now at its lowest levels in real terms since around 1990. No one should be left destitute and forced to turn to crisis services because of the minimum 5-week wait for the first Universal Credit payment.
“Ministers have the power to ease worsening levels of debt across our country by ensuring that work coaches always carry out an affordability assessment before any deductions to support are made. For social security to provide a reliable lifeline to families, repayments must never leave families without the ability to pay their rent, bills and live with dignity.”
Work and Pensions minister David Rutley revealed the figures in response to written questions by Jonathan Reynolds.
He said: “Processes are in place to ensure deductions are manageable and customers can contact DWP Debt Management if they are experiencing financial hardship to discuss a reduction in their rate of repayment, or a temporary suspension, depending on financial circumstances.”
He said that problems had been made worse because deductions had been suspended for three months at the start of the pandemic last year.
Chancellor Rishi Sunak faced widespread criticism when he decided to press ahead with plans to cut weekly Universal Credit payments by £20 a week in the face of dire warnings on the impact it will have on millions living on the breadline in the UK.