Universal Credit Deductions

Claudia Webbe criticised the Government's universal credit system for penalising and humiliating people in poverty. She highlighted that deductions are made from a staggering 45% of claimants, with many needing to request advance payments due to the five-week waiting period. A TUC survey found that these advanced payments put 86% of claimants into financial difficulty. Webbe also noted that sanctions under the universal credit system added an additional layer of hardship and fear for claimants.

Mr. Linden is concerned about the impact of universal credit deductions, citing data from Citizens Advice that two in ten households have £100 or less after paying for monthly essentials. He notes that nearly half of Scottish households on universal credit are affected by deductions with a total deduction of around £12 million per month. Mr. Linden highlights the significant hardship these deductions cause and their link to food bank usage, with over two-thirds of people referred to Trussell Trust food banks facing deductions. Linden suggested that better communication of information to claimants could be an action point, encouraging transparency and flexibility regarding deduction policies.

My hon. Friend has succinctly summed up the issues in the letter from his constituent. He agrees that faith-based food bank providers are doing excellent work and most people support universal credit's principle to encourage people back into work, but when there are deductions and a penalistic regime, people suffer further poverty.

Mr Williams highlighted the severe impact of universal credit deductions on Arfon, one of Wales' poorest constituencies. He cited statistics showing that in February this year, 48% of people claiming universal credit faced deductions averaging £59 per month, resulting in an annual loss of £3 million for the constituency's poorest residents. Williams also questioned whether the Minister could live on reduced universal credit and emphasised the need to address child poverty by lifting restrictions such as the two-child limit.

Ian Byrne highlighted the negative impact of universal credit deductions on constituents, citing examples such as advance payments and overpayments. He noted that there is no requirement for the DWP to determine affordability before making deductions, which leads to extreme hardship including inability to afford essentials like food and heating. Byrne referenced research by Trussell Trust and Citizens Advice showing high percentages of people referred to food banks due to benefit deductions and increased vulnerability among those with long-term health conditions or disabilities.

I commend the hon. Member for bringing this matter forward and will be contributing to the debate. I agree with the vision of a world where food banks do not need to exist, as stated by the Trussell Trust in Newtownards. He agreed with Chris Stephens' concerns about deductions from universal credit claims and highlighted that the number of households affected by these deductions is increasing. He endorsed the concerns raised about universal credit deductions, citing a letter from a local food bank manager in Newtownards which reported a 30% increase in clients using food banks compared to the previous year. The letter highlighted that the number of parcels provided this year is more than double the amount distributed five years ago due to inadequate social security benefits. Shannon asked for data on universal credit deductions in Northern Ireland, as the information was not available despite being requested by a previous speaker.

My constituent has contacted me to inform that due to the Universal Credit calculation cycle, they are trapped in an endless recalculation and financial hardship cycle. The current assessment cycle is not fit for purpose. The hon. Member talked about budgeting. For many, short-term budgeting is a necessity; the housing element of universal credit paid directly to claimants contributes to an entirely foreseeable problem. She agrees that removing this direct payment would help claimants budget given soaring living costs.

The speaker highlighted that about 42% of households on universal credit have their benefits reduced below standard rates each month, pushing many families into destitution. He mentioned that the Trussell Trust reports 57% of UC households using food banks face deductions and more than half of those with children or limited work capability also experience deductions.

Mr. Whitley highlighted the catastrophic impact of universal credit deductions on constituents, noting that nearly 14,000 people in Birkenhead are receiving universal credit and facing frequent issues with insufficient payments during cost-of-living crises. He cited research showing that basic universal credit levels stand at their lowest as a proportion of average earnings, leaving 90% of low-income households unable to afford essentials. Mr. Whitley also mentioned that about 40% of those affected are in work and most deductions are debt repayments rather than incentives for claimants' obligations under the scheme.