Rishi Sunak baffles MP with claims Universal Credit is 'generous'
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River Olivia Rose, 41, has never received the full amount of Universal Credit that she is owed for more than a year due to deductions. She said “I walk everywhere because I can’t afford travel costs, but I’m exhausted. I’ve lost so much weight I fit into children’s clothes.”
Ms Rose is quickly losing options as her monthly income continues to dwindle, and highlighted that even last resorts are beginning to dry up.
She said: “I use foodbanks, but you can only use the food bank three times a year. I can use it one more time this year.
“This month I have just £143 to live on, I don’t understand what the deductions are for and there is nobody I can speak to who can explain.
“I have to beg and borrow from friends and family who are already struggling themselves in order to get by. Deductions don’t help me find a job, and really impacts on my mental health.”
The Leeds resident is receiving, at times, £234 less than she is due from Universal Credit.
She says the deductions have been taken off without much explanation but she believes it is due to an advance loan she took when she first signed up to the benefit.
Universal Credit comes with a five week wait for one’s first payment, and recipients who struggle to get by during this time can get some of their payment in advance.
Ms Rose used this to cover her living costs during the five weeks, child tax credit overpayments and a court fine she could not afford to pay herself.
Lloyds Bank Foundation is urging the Government to review how Universal Credit deductions are managed and implemented, to help people like Ms Rose avoid the dire circumstances she now finds herself in.
The foundation is recommending that Government reduce deductions to five percent to help benefit recipients stay afloat whilst paying back what they owe.
They also suggested that the Government should carry out affordability assessments with qualified advisors and write off historic debts that were caused by administrative errors on the Government’s side.
Chief executive of Lloyds Bank Foundation for England and Wales, Paul Street, commented: “At a time when the cost of living is soaring, the Government itself is making it harder for people by deducting significant sums from benefits, making it even harder for people to make ends meet.”
Mr Street claimed the current system “is clunky and not fit for purpose” with research from the foundation showing that these deductions are pushing households into poverty.
The foundation’s report claimed that more than two million people are left unable to afford basic necessities due to the deductions, driving them into debt and subsequently poverty.
The report was released today, Wednesday May 11, just over a month since the price hikes throttling budgets across the nation set in in April.
It was paired with the foundations’ calls for immediate review and changes to the deduction system in order to help recipients during the cost of living crisis.
It estimated that 44 percent of those receiving Universal Credit have automatic deductions applied to their sums before they ever see the money.
An average of £78 per month is taken in these deductions, equivalent to almost 20 percent of the payment for a single person over the age of 25.
However, many are facing far bigger deductions, with the report showing that people who have these deductions are twice as likely to go without food, toiletries and utilities as a result.
As inflation breaches eight percent, and the Bank of England base rate hitting one percent, the cost of living crunch is not going anywhere, while benefits, including state pension, have increased by just three percent.
A Government spokesperson said: “We carefully balance our support for claimants with our duty to protect taxpayers money so we have further reduced the cap on Universal Credit deductions and paused the Fuel Direct scheme, that allows energy bill payments to be taken directly from benefits. Safeguards are in place to ensure deductions are manageable and customers can contact DWP to discuss their repayments if they are experiencing financial hardship.
“We know work is the best route out of poverty so we’re putting an average of £1,000 more per year into the pockets of working families on Universal Credit and have also boosted the minimum wage by more than £1,000 a year for full-time workers.”
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