Universal credit warning as over 1 million applicants see their pay cut

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More than a million people who claimed universal credit at the start of the coronavirus pandemic earlier this year have seen their payments cut, a charity has found.
According to the Child Poverty Action Group (CPAG), 63% of those who applied for benefits during this period (between March and June) had money deducted from the payments they received.

In addition, in August, 1.85 million benefit recipients also received reductions.

CPAG analyzed the official figures and said nearly all deductions included paying off an early loan that applicants can take out while they wait five weeks before receiving their first payment.

Of the 1,060,000 claimants whose amounts were regularly deducted, 810,000 repaid an advance, 50,000 had a deduction for another reason, and 200,000 repaid an advance and another debt.

The analysis is part of the Covid Realities research project, based at the universities of York and Birmingham and funded by the Nuffield Foundation.

Dr Ruth Patrick, lecturer in social policy and social work – who heads Covid Realities and co-author of the report – said: “When the pandemic hit millions of families were forced into Universal Credit and hoped to find refuge there.

“In fact, they’ve found a system that expects them to survive for five weeks without any payment or, if they take an advance, live on much less than their assessed needs so they can pay back the money. that they had no choice but to ask. .

“The pandemic has revealed how hard and insane this is.”

Deductions can be taken for a variety of additional reasons, including to reimburse past benefit overpayments, rent arrears, utility bills, and mortgage interest.

Up to 30 percent of the monthly allowance can be deducted, with this percentage expected to drop to 25 percent in October 2021.

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Covid Realities participant Aurora, a mother of two claiming universal credit, said: “It’s impossible to deal with what’s left when debt deductions are taken. It is time to solve this problem and provide much needed help to families and their children.

A spokesperson for the Ministry of Work and Pensions said: “Advance payments are available for applicants who need urgent financial support, and from the end of this year applicants will be able to spread the reimbursement over. two years of payments rather than one.

“For applicants who find themselves in unforeseen difficulties, the staggering of payments may be deferred for up to three months.”

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