Call for action to cut UC deductions

New analysis by the Child Poverty Action Group shows many families are facing even greater financial problems due to the way Universal Credit deductions operate.

Rising Costs

 

Many families are being thrown into greater financial distress due to deductions from their benefits, in many cases to pay back advances made to tide them through the five-week waiting period for Universal Credit, according to an analysis by the Child Poverty Action Group [CPAG].

As more and more families are being transferred over from legacy benefits to Universal Credit the CPAG says the five-week wait for the benefit is causing serious problems. It says new official figures show there are 2.3 million children in households on universal credit (UC) which are having debt deductions from their benefit, forcing them to live on significantly less than their entitlement.

The Department for Work and Pensions (DWP) can make deductions from UC for a range of debts, including to utility companies, but the figures show 45% of deductions are for repayment of UC advances.   The CPAG says most advances are taken out by claimants to get them through the five-week wait for a first UC payment.

Of all children in UC households, around half (51%) are in households with debt deductions and the average per-household monthly deduction is £74, according to the figures ((totalling £84 million per month or £1 billion a year) across Britain.

The CPAG is calling on Government to change the deductions rules to prevent more children from going without the support they need.  The charity wants the DWP to reduce the overall cap on deductions (for any type of debt) from the current 25% to 15% of a claimant’s benefit. It says this would mean that couple-families with children who are having deductions could receive up to £58 more of their entitlement each month. It calculates the average single parent with deductions could receive up to £37 more of their entitlement.

Alison Garnham, chief executive of CPAG, said: “The DWP’s deductions policy pursues the worst-off families for money they haven’t got – forcing down their incomes from an already inadequate level of support, just when costs are high.  It’s particularly unjust that debts are often because of the five-week wait for a first universal credit payment  –  an impossible stretch for the many families who have no savings buffer.   The DWP must reduce the deductions rate now before more children’s lives are damaged.”



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