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Nearly half of Universal Credit claims weren’t paid in full

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Four in ten Universal Credit claims in May included a deduction to the payment, it has been revealed.

More than 5.6 million people are in receipt of Universal Credit, nearly double the claimant number in February ahead of the coronavirus pandemic.

But it has been revealed by Will Quince, parliamentary under-secretary for the Department for Work and Pensions, that for Universal Credit claims due a payment during May 2020, 40% (1.62 million claims) had a deduction.

This is in response to a question by Nadia Whittome, Labour, Nottingham East, on how many and what proportion of Universal Credit claimants were subject to a deduction of any type in the most recent month for which data is available.

Deductions include advance repayments (usually there’s a five-week wait for first UC payments), third party deductions, but exclude sanctions and fraud penalties.

However, third party deductions were suspended due to Covid-10 from 10 April to 10 May, and other deductions, excluding advance repayments, were suspended for three months from the beginning of April.

As such, the figures “may not be representative of the full cohort of claims which would otherwise be having deductions”, further notes explained.

Peter Tutton, head of policy at StepChange debt charity said: “Universal Credit deductions undoubtedly cause financial difficulties for the most vulnerable.

“Last year, 93% of StepChange clients surveyed with a deduction from Universal Credit in place said it had contributed to their financial difficulty or hardship. This is why StepChange are calling on the government to immediately suspend non-priority deductions, bring forward plans to extend the repayment of advances to 24 months, and lower the cap on deductions to 25% of the standard allowance as soon as possible.

“This should be quickly followed by urgent reform to ensure that deductions are made only where they are affordable without causing hardship or making debt problems worse.”

Universal Credit uplift

At the start of the pandemic, the government increased the standard allowance of Universal Credit and Working Tax Credit payments by £20 a week.

But this uplift was only a temporary measure and its withdrawal will see more than a million people plunge into poverty or face deeper financial hardship if the ‘lifeline’ benefit is cut next year.

Speaking in the Commons today, Prime Minister Boris Johnson confirmed that the £20 uplift will last until the end of the financial year, despite pleas from think tanks and charities to continue the £1,040 increased payment.

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