Millions of struggling Universal Credit claimants have payments docked £60 during coronavirus crisis to repay debts
STRUGGLING Brits have had £60 on average docked from Universal Credit payments during the crisis to cover the cost of advance loans.
A combined £100million was deducted from 1.6million Brits' monthly benefit payments in May, according to new figures published by the government.
⚠️ Read our coronavirus live blog for the latest news & updates
In a written response to SNP MP Chris Stephens, it was revealed that four in ten (40%) claimants had cash taken from their benefit payments in May.
This was to repay what's known as advance loans, as well as to cover to the cost of other deductions excluding sanctions and overpayments.
In March, the government suspended sanctions for failing to look for work and the requirement to meet job coaches due to the pandemic before restarting these in June.
The Department for Work and Pensions (DWP) also promised in April that it wouldn't chase benefits that had been overpaid during the coronavirus crisis, although these repayments have since restarted.
What to do if you have problems claiming Universal Credit
IF you're experiencing trouble applying for your Universal Credit, or the payments just don't cover costs, here are your options:
- Apply for an advance - Claimants are able to get some cash within five days rather than waiting weeks for their first payment. But it's a loan which means the repayments will be automatically deducted from your future Universal Credit payout.
- Alternative Payment Arrangements - If you're falling behind on rent, you or your landlord may be able to apply for an APA which will get your payment sent directly to your landlord. You might also be able to change your payments to get them more frequently, or you can split the payments if you're part of a couple.
- Budgeting Advance - You may be able to get help from the Government for emergency household costs of up to £348 if you're single, £464 if you're part of a couple or £812 if you have children. These are only in cases like your cooker breaking down or for help getting a job. You'll have to repay the advance through your regular Universal Credit payments. You'll still have to repay the loan, even if you stop claiming for Universal Credit.
- Cut your Council Tax - You might be able to get a discount on your Council Tax or be entitled to Discretionary Housing Payments if your existing ones aren't enough to cover your rent.
- Foodbanks - If you're really hard up and struggling to buy food and toiletries, you can find your local foodbank who will provide you with help for free. You can find your nearest one on the
This temporary grace period was designed to ensure people had more money in their pockets during the crisis.
It followed similar help announced by city regulator the Financial Conduct Authority, which has given users of credit cards, personal loans, car finance, and high-cost credit until October 31 to apply for a repayment freeze.
But this help wasn't extended to those who'd taken a Universal Credit advance loan, meaning these borrowers continued to get lower benefit payments during the crisis while they repaid the loan.
Universal Credit can take up to five weeks to be paid once you've registered, and any existing benefits you receive will stop altogether in the meantime.
This is one of the reasons why The Sun is calling for the wait to be slashed to two weeks as part of our Make Universal Credit Work campaign.
The Sun wants to Make Universal Credit Work
UNIVERSAL Credit replaces six benefits with a single monthly payment.
By the time the system is fully rolled out in 2023, nearly 7million will be on it.
But there are big problems with the flagship system - it takes five weeks to get the first payment and it could leave some families worse off by thousands of pounds a year.
And while working families can claim back up to 85% of their childcare costs, they must find the money to pay for childcare upfront - we’ve heard of families waiting up to six months for the money.
Working parents across the country told us they’ve been unable to take on more hours - or have even turned down better paid jobs or more hours because of the amount they get their benefits cut.
It’s time to Make Universal Credit work. We want the government to:
- Get paid faster: The government must slash the time Brits wait for their first Universal Credit payments from five to two weeks, helping stop millions from being pushed into debt.
- Keep more of what you earn: The work allowance should be increased and the taper rate should be slashed from from 63p to 50p, helping at least 4million families.
- Don’t get punished for having a family: Parents should get the 85% of the money they can claim for childcare upfront instead of being paid in arrears.
Together, these changes will help Make Universal Credit Work.
Join our or email [email protected] to share your story.
During this five-week wait, households hard on cash can apply for an advanced loan to tide them over until their first Universal Credit payment is made.
But you're expected to pay it back within the first 12 months of getting it.
And DWP will deduct an amount from your Universal Credit payment every month to cover this cost, starting with your first pay out.
Mr Stephens told , which first published the data, that these figures add "more weight" to the case for non-repayable grants to be introduced instead of loans.
Conservative MP Will Quince, who responded to Mr Stephens' request, says that from October 2021, the advance loan repayment period will be extended from 12 months to 24 months
The amount that can be deducted from benefit payments will also fall from 30% to 25% at the same time.
Mr Quince added: "For those who find themselves in unexpected hardship, advance repayments can be deferred for up to three months in certain cases."
The number of people claiming Universal Credit currently stands at more than 4million.
more on universal credit
Think tank the Resolution Foundation has warned that hundreds of thousands of Brits have gone without help during the crisis as they were afraid they wouldn't be able to repay the loans.
READ MORE SUN STORIES
Meanwhile, MPs on the Treasury Select Committee have also called for Universal Credit claimants to have an extra £20 a week bonus extended beyond the 12 months initially granted by chancellor Rishi Sunak.
It comes as UK unemployment has risen to 4.1% in the three months to July with 695,000 workers losing their jobs since March, according to the latest ONS data.