'Half' of Universal Credit claimants lose £63 in DWP deductions

Half of Universal Credit claimants are becoming worse off as they lose money through automatic Department for Work and Pensions (DWP) deductions. There is £1 lost in every £13 basic payment to repay debts to private landlords and utility firms and correct tax office errors, a thinktank has said.

Some on Universal Credit, they have had money deducted for as long as they have been on benefits, BirminghamLive has reported. It has led to a warning from The New Economics Foundation (NEF) that each household with money deducted lost an average of £63 a month, which is a total loss of £1.3bn.

One woman, known as Annie as her name has been changed to protect her identity, is a single parent of two children in north-east England. Having had a budgeting loan, she has £66 a month deducted from her benefits payment of £660 a month.

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“That’s the only loan that any of us [on benefits] have access to, and for me, it helps a lot with pre-Christmas and getting back to school in September – having a bit of money to cover the costs that can’t fit into my daily budget,” Annie said.

She added: "That’s an extra £66 that could go towards the food budget, or the children could join clubs. Right now, fruit is a luxury, meat is a luxury. I am skipping meals left, right and centre because the kids need to eat. I have holes in my shoes because my kids need new school shoes."

Calls have been made for changes and Sam Tims, a senior economist at NEF, said: "Cuts to already meagre levels of universal credit have made it harder for people to afford the basics like food on the table and a warm home. The mental and physical strain this creates makes it more likely that they will be forced to take time off work.

"If we want an economy that allows everyone to thrive, the next government must guarantee that social security covers people’s essentials and ensure this guarantee isn’t undermined by the pursuit of debt."

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