Benefit Deductions Causing Financial Hardship

Deductions from benefit payments is causing financial hardship pushing people into poverty and resulting in food bank reliance and inability to pay for everyday living costs.

A survey conducted by the Trussell Trust reveals that nearly half of those being referred to its food banks are experiencing deductions being taken from their benefit payments despite the government saying that they’ve twice cut the amount that can be deducted.

The government states “We recognise people are struggling with rising prices which why we are protecting millions of the most vulnerable families with at least £1,200 of support.” Whilst at the same time failing to address the reality that being repayment amounts are still too high proving that the ‘support’ being offered by the government being not nearly enough.

Once again making statements that portray themselves as the next saviour, whilst at the same time pushing policies and failing to address already existing policies that cause hardship.

The survey goes on to reveal that almost half of respondents reported deductions from their benefits to recover overpayments, sanctions or arrears, with the amounts already deducted from monthly payments before they arrived in the recipient’s account.

To put it in layman’s terms very few people manage to receive their full payment allowances and are drastically reduced before reaching them.

Meanwhile MPs on the parliamentary Work and Pensions Select Committee have said this practice needed to be paused during the cost of living crisis, as it was during the pandemic.

Thousands were already struggling to put food on the table each day before the cost of living crisis which has undoubtably made their situations much worse.

This is worsened by having to repay the advance payment loan whilst waiting for a universal credit claim to be processed. This debt on its own can cripple a person financially. Many would agree that the advance payments shouldn’t come in the form of loan to be repaid.

In July, the Work and Pensions Committee of MPs said the repayments, taken from more than 2 million claimants, were pushing the most vulnerable into destitution.

Sir Stephen Timms, Labour MP for East Ham and committee chair, said: “We think the problems are sufficiently acute now that they should be suspended again, it’s clearly not working.

“There was a university research report which made the point that the social security system is acting not so much as a safety net but more as a debt collector at the moment.” 

In a statement, a Department for Work and Pensions (DWP) spokesperson said: “We have reduced the maximum amount that can be deducted from a Universal Credit award twice in recent years. 

“We’ve also doubled the time period over which they can be repaid and claimants can contact DWP to discuss deductions if they are experiencing financial hardship.”

In conclusion the cost of living crisis and resulting job losses has left many reliant upon credit card borrowing which has reached it’s highest level in 18 years. Combined with benefit loan deductions has created a tsunami of debt and poverty which will undoubtably put pressure upon already struggling food banks and organisations.

Not forgetting that this will also cause irreparable damage to the economy resulting in increased inflation levels and an increase in the everyday cost of living.

Photo by Ahsanjaya on Pexels.com

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