Universal Credit claimants will notice £183 shortfall in DWP payments

Universal Credit claimants are losing more than £1bn a year to "automatic" Department for Work and Pensions deductions. The DWP is deducting money from half of universal credit claimants to repay debts, but benefits are already too low for people to afford the cost of living.

Analysis by the New Economics Foundation (NEF) showed that claimants lost a total of £1.3bn from their support in 2022/23. Each household with money deducted lost an average of £63 a month, the report from NEF - which was released today - explained.

Sam Tims, senior economist at the NEF, said: “The social security system should provide a safety net for us all. But low-income families are trapped in a vicious cycle of debt due to insufficient wages and state support and the relentless pursuit of debts that built up as a result.”

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The Joseph Rowntree Foundation estimates that Universal Credit falls short by around £120 each month - meaning, combined with a £63 monthly deduction, UK households are £183 short when it comes to keeping their heads above water.

Mr Tims added: “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.”

The Big Issuey spoke to a single mother who was falsely accused of owing the DWP £12,000, who said: “I’m absolutely devastated because it changed everything for me. Getting that letter and thinking that I’d have to pay that back made me very fearful of ever claiming again.”

Mr Tims said: “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.”