One million Universal Credit ‘Covid claimants’ having money regularly deducted

The Department for Work and Pensions. Photograph: Chris Young / PA Wire
7 Jan 2021 @ 12.01 am
| News

Around one million people who claimed benefits during the first wave of the coronavirus pandemic are having money regularly deducted from their payments, according to a York-based analysis.

Nearly two thirds (63%) of those who claimed for Universal Credit between March and June are living on less than they are assessed to need due to deductions, the Child Poverty Action Group (CPAG) said.

This compares to 1.85 million claimants with deductions receiving Universal Credit in August (41% of the total).

The CPAG analysed official figures, and said almost all of the deductions include repayments of an advance loan that claimants can take out while they wait five weeks before receiving their first payment.

Of the 1,060,000 claimants having money regularly deducted, 810,000 were repaying an advance, 50,000 had a deduction for another reason and 200,000 were repaying an advance and another debt.

The analysis is part of the Covid Realities research project, based at the universities of York and Birmingham and funded by the Nuffield Foundation.

‘Harsh and nonsensical’

Dr Ruth Patrick, lecturer in social policy and social work at the University of York – who leads Covid Realities and co-authored the report – said: “When the pandemic struck millions of families were forced on to Universal Credit and hoped for safe harbour there.

“In reality, they found a system that expects them to survive for five weeks without any payments or, if they take an advance, to live on much less than their assessed need so that they can repay money they had no option but to ask for.

“The pandemic has exposed just how harsh and nonsensical this is.”

Deductions can be taken for a range of additional reasons including to repay previous benefits overpayments, rent arrears, utility bills and mortgage interest.

Up to 30% of the monthly allowance can be deducted, with this due to drop to 25% in October.

One Covid Realities participant, Aurora, a mother-of-two claiming universal credit, said: “It’s impossible to cope on what’s left over when debt deductions are taken out. It’s time to fix this; and provide much-needed help to families and their children.”

A spokesman for the Department for Work and Pensions said: “Advance payments are available to claimants in need of urgent financial support, and from later this year claimants will be able to spread the repayment of this across two years of payments rather than one.

“For claimants who find themselves in unexpected hardship, the spreading of payments can be deferred for up to three months.”