Unfair universal credit clawbacks pushing more into poverty

Debt

Claimants are having significant sums deducted at source from their benefits for historic debt 

10th April 2018 by Robert Armour 0 Comments

A charity has hit out at unfair benefit clawbacks that are pushing low income families further into poverty.

Citizens Advice Scotland (CAS) responded to figures showing many universal credit (UC) claimants are having substantial deductions made to their payments in order to pay off debts.

Figures obtained by Labour MP Ruth George say that in January 6% of UC claims in the UK had 40% deducted from their standard allowance.

CAS policy manager Keith Dryburgh said: “Local CABs across Scotland are reporting cases of universal credit claimants who are struggling to make ends meet after direct deductions were made to their payments.

“Such cuts can have a significant impact on families who were already on low incomes. We would urge anyone in this position to contact their local CAB for free, impartial and confidential advice.”

It comes as Paul Gray, chairman of the independent social security advisory committee, said the UK government is facing a massive backlash when claimants of the new benefit realise their income is substantially lower on the new benefit.   

Gray said the aim of universal credit to simplify the system and encourage people back into work was right but warned that once claimants realised they are losing out, the government will come under increasing pressure to make changes.

Currently the new benefit is subject to a phased launch across the UK. In some areas, that means a partial roll-out where some benefits - such as housing support - and being introduced before full implementation.  

“It is a problem that a major change in the system is being introduced which will mean there are substantially more losers than gainers,” he said.

“Any government has got to say, if they want to offset that, where are we going to find £3bn or £4bn from? Are we going to spend less in other areas, are we going to raise taxes, or are we going to borrow more?

“That is a high-level political position that I don’t think a detailed scrutiny committee like mine should take a view on, or get into a campaigning position on. But it is our job to point out the consequences.”