Serious mistakes by DWP officials in assessing eligibility for Universal Credit (UC) risks plunging low-income households further into poverty and debt, after if was revealed that thousands have been overpaid benefits through no fault of their own and are now being made to hand it back in extortionate installments.
An investigation by Labour has uncovered high levels of UC over-payment blunders. An analysis of benefit fraud and error statistics show that over the last two years about a third of over-payment’s were as a direct result of DWP cock-ups.
Incidentally, this appears to correlate with a drop in staffing levels, suggesting that staff are struggling to cope.
However, the Department for Work and Pensions argue it has a responsibility to recover over-paid benefits, but the sheer scale of the deductions will almost certainly add to the financial misery already faced by many low-income households.
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Labour MP Ruth George warned the draconian cuts in payments will push families further into debt and into the hands of high-cost lenders.
She added: “Support under Universal Credit is already below poverty levels for many groups, especially lone parents and disabled people.
“It is almost impossible to repay a loan when your income is so low, and the high cost of credit for people on low incomes creates a vicious circle of debt.”
One of the benefits being replaced by UC is tax credits. The maximum deduction for debts under the old system was 25 per cent for those with an income of less than £20,000 a year.
But changes to legislation mean the DWP can now recover debts in much larger installments, including those caused by their own mistakes when assessing or reviewing claims.
95,620 UC claimants had deductions taken from their payments due to debt between April 2016 and October 2017, with 40,521 of these occurring within a single month.
About £90 million was overpaid in Universal Credit in 2016-17 alone, and this is before many millions more are moved to the new benefit.
A DWP spokeswoman said: “We have a duty to the taxpayer to recover any overpayments and we recovered £1.1 billion last year.
“People are told about this in advance and they are recovered by regular deductions.
“There are safeguards in place to protect claimants from large deductions being taken at one time and budgeting support is available to help people manage their money.”