Universal Credit is designed to provide support to those on low income and individuals who are currently out of work. Understandably, then, the benefits system has been particularly relied upon during the COVID-19 pandemic, as many lost their jobs or saw an income reduction. But analysis from the charity Child Poverty Action Group (CPAG) has asserted one million households who were forced to claim Universal Credit when coronavirus struck are now entering 2021 with debt deductions taken from their payment.
An advance is available for individuals who need help paying bills or covering other costs while they go through the five week standard wait period to receive their first Universal Credit payment.
These must be applied for, with a claimant required to outline why the advance is needed, and verify their identity.
However, ultimately, the sum must be paid back, and will be deducted from subsequent Universal Credit payments – it must be repaid within 12 months.
The CPAG, though, has highlighted further job losses are likely to be made as the UK enters another lockdown, and that deductions continue to be made.
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Research showed 1,060,000 of these so-called ‘covid claimants’ currently have a deduction of some kind from their Universal Credit.
Of these individuals, CPAG states 810,000 are repaying an advance only, 50,000 have a deduction for another reason, with 200,000 having deductions to repay as a Universal Credit advance and another debt.
Dr Ruth Patrick, Lecturer in Social Policy and Social Work, who co-authored the report, commented on the issue.
She said: “When the pandemic struck, millions of families were forced on to Universal Credit and hoped for a safe harbour there.
Deductions, then, can only deepen issues families are already facing.
Dr Ruth continued, by urging the government to respond to calls for reform, by making advances non-repayable.
She said: “That would take Universal Credit a step closer to being fit for purpose.
“It would offer some hope to the many families receiving Universal Credit who are going into a new year worrying about the new restrictions, school closures and whether they can stay afloat financially.”
The report has also called for the five-week wait for Universal Credit to end, and for the government to write off historical tax credit overpayments.
A Department for Work and Pensions (DWP) told Express.co.uk: “Advance payments are available to claimants in need of urgent financial support, and from later this year claimants will be able to spread the repayment of this across two years of payments rather than one.
“For claimants who find themselves in unexpected hardship, the spreading of payments can be deferred for up to three months.”