Tuesday, October 27, 2020

1.6 million households hit by £60 cut to benefits in just one month

DWP urged to scrap universal credit advance "loans" before thousands more are pushed into debt.

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The Tory government has been told that it can no longer ignore calls to turn Universal Credit advance payment loans into non-repayable grants, after DWP figures revealed that 1.6 million households saw their benefits slashed by £60 in just one month at the height of lockdown.

Two in five households on Universal Credit had money deducted from their claim in May, almost entirely to repay loans to the Department for Work and Pensions (DWP).

The shocking figures were obtained by SNP MP and Work and Pensions Committee member, Chris Stephens, in an answer to a written parliamentary question.

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Other deductions to repay historic debt and overpayments were suspended in May but now they have resumed, it is likely that more than £1 billion in total will be deducted from Universal Credit claims this year, according to Feeding Britain – who have identified deductions from Universal Credit as one of the prevalent causes of food bank demand.

In Scotland, the Glasgow East constituency was the hardest hit, with 4,600 claims having had an average of £55 deducted.

Therese Coffey MP, Work and Pensions Secretary. Photo by Office of the UK Prime Minister.

The UK government argues that introducing advance payment grants for Universal Credit could see an increase in fraudulent claims.

The SNP has proposed a solution to this, whereby advance payments become non-repayable grants once the claimant has been deemed eligible for Universal Credit.

This, they say, would take away the need to reverse the five-week wait, which the DWP has said would be “operationally challenging.”

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Commenting, Chris Stephens MP said: “The five-week wait for Universal Credit has made it necessary for millions of people with little or no money to rely on loans from the DWP.

“Rather than prevent hardship – as the welfare state is supposed to do – these loans are, for far too many people in desperate situations, only delaying it by a few weeks until the deductions kick in.

“These figures add yet more weight to the case for non-repayable grants to be introduced, in place of loans, so as to genuinely prevent hardship.”

Commenting, Glasgow East MP David Linden added: “Over 1 million people have now been plunged into, or further into, debt and had vital money taken from them because of the Tories’ ridiculous advance payment loans and five-week wait – and in the middle of an global health and economic crisis when people are already suffering from job losses and reduced income.

“In my constituency alone, 4,600 people have had an average of £55 taken from crucial social security support.

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“This cannot continue. Boris Johnson must listen to us and introduce the SNP’s proposal to turn advance loans into non-repayable grants without delay to prevent thousands more facing the same situation.”

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