Universal credit: 10% deducted from claimants, figures show

Ministers have been accused of “penalising struggling families” after figures emerged showing that £1 of every £10 in universal credit payments is deducted from claimants.

Data published by the Department for Work and Pensions (DWP) shows the total amount of money withdrawn from claimants’ monthly allowance under the new system has increased from £13,000,000 to £39,000,000 in the year to October 2018.

When factoring in the increase in uptake of universal credit, this represents a rise from 7 per cent to 10 per cent, fuelling concerns that the process of deducting benefits under the welfare reform is forcing a growing number of claimants to “sacrifice the basics”.

One seriously ill father-of-two told The Independent he was living “hand to mouth” and having to rely on charities to provide basic household items because the DWP was withdrawing more than £90 from his allowance each month. A deduction is made from universal credit payments when claimants have outstanding debts with their utility companies or landlord, or when the DWP discovers they received a benefit overpayment at some point in the past.

Deductions are also made to pay off advance payments, which are offered to claimants when they first move onto the new benefit system to support them financially during the controversial five-week wait for universal credit. Currently there are around 850,000 claimants with an advance repayment in place.

Martin Weaver, 42, who suffers from kidney disease and heart disease, has had money deducted from his universal credit entitlement every month since he started receiving the benefit after he was forced to give up with job as a hotel manager last July due to his illness.

The father-of-two, who has to go to hospital three times a week for kidney dialysis, said he was surviving on beans on toast despite this being bad for his condition, and relying on charities to donate him basic things like a sofa and a washing machine.

Shortly after he went onto universal credit last year, Mr Weaver, who has two sons aged five and three who stay with him three nights a week, was forced to move into an old caravan with just a small electric heater during the winter months. He recently moved into a home, but is left with less than £100 per month after rent.

Martin with his youngest son

The 42-year-old, who lives in Scarborough, is seeing £50 withdrawn from his monthly allowance to pay off an advance payment he received when he first moved onto the benefit, as well as around £40 being deducted each month for previous debts and historic overpayments.

“It’s awful. In the past month I’ve spent a week and a half in hospital. They say people should come off benefits and get a job. I literally can’t work because of my health at the moment,” he said.

“I’ve been lucky to have been donated a kitchen table and chairs, a sofa, a double bed, an electric cooker and a washing machine from charities. It doesn’t feel good, nobody likes to do that, but desperation means there isn’t another option.

“Every time the dietician sees me she talks about the right things to eat, but in reality I just can’t afford them. Often I’m living on £30 a month for food.

“My sons don’t understand the situation. Before they come round I make sure I save some money. I’ll go buy a pack of yoghurts and packs of crisps for them. It’s tough. Something has to change.”

Ruth George MP, who obtained the figures through a parliamentary question, said she was “very concerned” by the figures, and that job centres, advice agencies and food banks were all reporting deductions from universal credit as being “one of the main reasons for people not having enough income to get by”.

The Labour MP for High Peak in Derbyshire, who is a member of the Work and Pensions Committee, said she was “particularly concerned” by the number of people with tax credit overpayments being deducted.

She cited separate figures showing two-thirds of universal credit claimants who have transferred from tax credits have an overpayment to repay, averaging £1,500 per person.

Currently, the maximum rate of deductions cannot normally exceed 40 per cent, but following pressure from campaigners to reduce this threshold the department has said that from October 2019 this will be reduced to 30 per cent.

“Even when capped at 40 per cent of the standard allowance, these deductions total £127 per month for a single person – almost £30 a week, and £200 per month – almost £50 per week for a couple,” Ms George said.

“I believe that these amounts, deducted from an already low rate of universal credit, are a significant factor in the rise of people who are struggling to get by.”

Last year, the biggest reason for a referral to a food bank was benefit payments not covering the cost of living, according to the Trussell Trust, the biggest food bank provider in the UK.

Garry Lemon, director of policy and research at the charity, said the universal credit deductions were “pushing people deeper into crisis right at the very point when support is most needed”.

He added: “Our benefits system was created to anchor people from being swept into poverty – so why is the government clawing back £1 in every £10 of universal credit that is paid to people most in need of our support?

“If someone is receiving universal credit it’s because our system has decided they need some extra support right now. But even when people’s payments come through intact, all too often that sum is too small to scrape by on.”

Jess Leigh, policy and campaigns manager at disability equality charity Scope, said “financial shocks” caused by the deductions had a “massive impact” on the lives of disabled people.

“This is one of a number of issues with universal credit which the DWP needs to focus on during the upcoming trial of managed migration in order to deliver a welfare system which works better for disabled people,” she added.

Polly Neate, chief executive of Shelter, said universal credit was “throwing families into chaos right across the country”.

“On top of facing a five-week wait for their first payment, the housing element is often so meagre that people struggle to afford some of the cheapest private rents without sacrificing basics. The result is parents making the impossible choice between paying the rent, heating or eating,” she said.

“When the worst happens and families can’t keep up with bills, the government’s power to deduct so much from their allowance makes a miserable situation even more dire.

“The answer doesn’t lie in penalising struggling families. Immediate support should come in the form of help and advice rather than deductions, but what people need more than anything is a system that actually works. Without drastic overhaul, universal credit will continue to force families into a catch-22 situation.”

A DWP spokesperson said: “Some people struggle to pay bills, and we make deductions from their universal credit to pay off debts directly, such as rent and fuel arrears, to help keep them in their homes.

“Universal credit simplifies the previously complex approach to deductions, and we have recently reduced the maximum amount that can be deducted from someone’s claim.”