The Lloyds Bank Foundation have expressed concerns about the way the DWP (Department of Work and Pensions) recovers debts from claimants when they start claiming UC (Universal Credit)

The Foundation have issued a report earlier this month (May 2022) warning that automatic deductions recovered from UC payments are at the time of writing, leaving more than 2 million people already living in poverty, unable to afford basic necessities such as food, gas and electric. This therefore and drives them further into debt and poverty.  

The Foundation report discloses that 44% of all UC claimants have money automatically deducted, the amount averaging £78 a month being taken. It also notes that many Universal Credit claimants are also having much larger deductions taken from their monthly payments.

Amongst the deductions are the advance payments given to UC claimants given to them whilst waiting five weeks for their first payment.

To add to this millions of new UC claimants find that they are unknowingly forced to pay back supposed Tax Credit overpayments that had occurred years earlier which were caused by an official error and no fault of the claimants.  

The Lloyds Bank Foundation have therefore called for historic debts to be stopped and any advance payments changed from loans to grants and affordability checks to automatically be made before any deductions are taken from Universal Credit and other benefits.

It’s doubtful that the DWP will listen to any of the report or making changes based upon its recommendations in the future.

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