DWP criticised for rejecting calls to pause Universal Credit payment deductions during cost-of-living crisis

‘The deductions policy is acting as a recruiting sergeant for food banks.’

A cross-party of MPs had called on the government to pause debt repayments on Universal Credit (UC) allowance after experts warned they were exacerbating the cost-of-living crisis and driving many families to food banks.

However, the calls were rejected by the Department for Work and Pensions (DWP) on the day the Queen died.

Despite warnings from charities that debt repayments are creating greater poverty among families on benefits, the DWP ruled the move was “not in the claimant’s best interest.”

In its ruling, the DWP said: “The Department does not believe that pausing deductions by default is necessarily in the claimant’s best interest.

“The impact of any future benefit uprating would clearly be diminished if it also coincided with the re-introduction of any paused deductions.

Payment sanctions

There are currently around 5.6m people claiming UC in the UK, as a result of unemployment or low income. Many claimants are still seeing deductions to their benefits, despite inflation being at a 40-year high and a cost-of-living crisis not seen for a generation.

In Leicestershire alone, the number of UC claimants having benefits docked has doubled in two years. 

Reasons for having benefit payments sanctioned can range from failing to attend a work-related interview to refusing a job offer.

The ruling has caused outrage among charities and the opposition, who warn that, in not pausing payment reductions, people will be pushed deeper into financial hardship.

A ‘recruiting sergeant for food banks’

Andrew Forsey, chief executive of the combatting hunger charity, Feeding Britain, told The Mirror: ‘At food banks, it is now a rare occasion to meet somebody on Universal Credit who does not have money being deducted each month.

“The deductions policy is acting as a recruiting sergeant for food banks.

“Among the things that would help most around the cost of living, and shorten the queues outside food banks, is to cancel or massively reduce these deductions.”

The Work and Pensions Committee, which explores the policies and spending of the DWP, is urging the government is give “much needed breathing space” to those who need it by pausing deductions.

Stephen Timms, Labour MP for East Ham who chairs the Work and Pensions Committee, said: “The charities are right. Ministers are not considering how the crisis is going to hit the least well off families.

“The government needs to show an interest not only in people who are going to vote Conservative.”

The DWP has reduced how much can be deducted from UC payments twice. It has also doubled the period over which it is repaid. In 2021, the Department cut its deductions cap to 25% of the standard allowance.

But charities believe such moves do not go far enough.

Sara Ogilvie, director of policy, rights and advocacy at the Child Poverty Action Group (CPAG) said the Work and Pensions Select Committee is right to say that now is time to pause these repayments.

“The cost of living crisis has pushed many families to the brink as a difficult winter looms.

“If the government is serious about supporting vulnerable households through the punishing months ahead, it must urgently reconsider its position on deductions, remove the benefit cap, and increase benefits to a level that reflects real need,” said Ogilvie.

Polly Jones, head of policy and research at food bank charity the Trussell Trust, said: “We know the deductions the DWP takes out of some people’s benefit payments leaves many recipients without enough money to afford the essentials, including food.

“Half of the people visiting food banks are having money deducted in this way by the UK government and it is pushing them even deeper into financial hardship. Last week we revealed the scale of financial hardship people on Universal Credit are experiencing as a result of the cost of living – with 38% of people said they’d gone a whole day with no food at all or just one meal, in the last month, because they couldn’t afford to buy enough food.”

Gabrielle Pickard-Whitehead is a contributing editor to Left Foot Forward

Comments are closed.