In a stark revelation, millions of Universal Credit recipients are losing an average of over £700 annually due to automatic deductions from their payments. The New Economics Foundation has highlighted that these deductions, intended to repay debts such as emergency advance payments and previous overpayments from the Department for Work and Pensions (DWP), are reducing basic Universal Credit payments by approximately 8%.
On average, claimants are seeing a reduction of £63 per month, amounting to £756 annually. This equates to a loss of £1 for every £13 they are entitled to receive. Connor Lawlor, a benefits expert at the charity Turn2us, explained to The Sun that these debts can accumulate in various ways. “Debts can accrue from Universal Credit and other benefit overpayments, even if the overpayment was due to an error by the DWP, benefit advances, and recovering hardship payments,” Lawlor noted.
The DWP also deducts payments on behalf of third parties if a claimant is indebted to them. These deductions can include rent and service charge arrears, council tax arrears, court fines, child maintenance, and utilities such as electricity, gas, and water.
Millions of Universal Credit Recipients Face Significant Financial Losses Due to Automatic Deductions
DWP Universal Credit deductions of £756 a year warning: Each month the average DWP Universal Credit claimant loses out on £63, which equates to £1 for every £13 they are due 🔗 Link below
— Craven Herald (@CravenHerald) June 6, 2024
Nearly one million households have had deductions to repay budgetary advances provided by the DWP to cover emergency costs. Additionally, 730,000 households have had to repay advances given to cover the five-week wait for their initial Universal Credit payment. Another 640,000 households are paying back tax credits that were previously overpaid by HMRC.
Beyond these categories, hundreds of thousands of claimants face other deductions, further eroding their financial support. Turn2us emphasizes the importance of seeking debt advice promptly before disputing or accepting any deductions from the DWP.
DWP Universal Credit £470 increase eligibility
Mr. Lawlor stressed the necessity for transparency from the benefit office. “The benefit office should inform claimants about the reasons for deductions. If this information is not provided, claimants should request it. It is possible to dispute an overpayment, but claimants need to provide evidence to support their case,” he advised.
As these automatic deductions continue to impact millions, the call for more transparent communication and support for those affected becomes ever more urgent. Advocacy groups like Turn2us continue to offer guidance, urging claimants to understand their rights and seek assistance to mitigate these financial losses.
