Half of universal credit claimants ‘lose money through automatic DWP deductions’

Thinktank says £1 lost in every £13 basic payment to repay debts to private landlords and utility firms and correct tax office errors

Half of those on universal credit are losing money on every payment because of automatic deductions by the Department for Work and Pensions (DWP), according to research.

Claimants are losing £1 in every £13 of basic payment to repay debts to private landlords and utility companies and correct mistakes made by the tax office, said the New Economics Foundation (NEF), a left-leaning thinktank. Each household with money deducted lost an average of £63 a month. This amounted to a total loss of £1.3bn from benefits support in 2022-23, NEF found through a series of parliamentary questions.

Some claimants have had money deducted for as long as they have been on benefits. Annie, whose name has been changed to protect her identity, is a single parent of two children in north-east England. She receives disability benefits because of mental health diagnoses that leave her unable to work. Annie takes part in Changing Realities, a project supported by the universities of York and Salford and involving more than 100 parents and carers across the UK to document life on a low income and push for change.


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