MORE than half a million people on Universal Credit are having tax credit overpayments deducted from their benefits leaving some without "enough to live on".
Many cash-strapped Brits are paying back historical overpayments they never knew about while others are the result of clerical errors during the Universal Credit application process.
A portion of the debt is automatically deducted from monthly payments, leaving households without enough cash to live off.
New figures from the Department for Work and Pensions show that 570,000 claimants are currently paying back the debts with their Universal Credit.
Of these, 410,000 have had repayments deducted from their benefits in the past 31 days to April 30.
On average, each claimant has £1,560 worth of outstanding tax credit debt.
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 pay out.
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 to help with 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 payments 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 Trussel Trust website.
Throughout our Make Universal Credit Work campaign, we've heard from hard-up Brits who are suffering because of deductions made on their benefits because of overpayments beyond their control.
Desperate mum Samantha Evans, 39, was left to rely on foodbanks after the family, who were entitled to £510 a month, received nothing because it turned out she'd been overpaid £4,000 in child tax credits over the previous year.
And every month, £37.77 is deducted from single-mum Farzana Miah's Universal Credit due to a back office blunder that saw her housing costs overpaid to the council by £1,950.
Margaret Greenwood MP, Labour’s Shadow Work and Pensions Secretary, feels that tax credit repayments can "push people into severe hardship", especially when someone isn't expecting it.
The Sun wants to Make Universal Credit Work
UNIVERSAL Credit replaces six benefits with a single monthly payment.
One million people are already receiving it and by the time the system is fully rolled out in 2023, nearly 7 million will be on it.
But there are big problems with the flagship new system – it takes 5 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 per cent of their childcare costs, they must find the money to pay for childcare upfront – we’ve heard of families waiting up to 6 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 7 million 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 63p to 50p, helping at least 4 million families.
- Don’t get punished for having a family: Parents should get the 85 per cent 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 Universal Credit Facebook group or email [email protected] to share your story.
Gillian Guy, chief executive of Citizens Advice, branded the figures as "staggering" and felt that the deductions, on top of other repayments such as for advance loans, "leave some people unable to cover their essential costs".
She added: "More than a million people claiming Tax Credits are expected to move onto Universal Credit in the next stage of the rollout.
"The government must ensure that people have enough to live on and make sure that any debt collection is affordable."
Not everyone who owes cash is currently making the repayments because, for example, they're either in work and not claiming benefits to the benefits are too small to make deductions.
It may also be because taking the cash from the benefit could leave someone without enough – or zero – cash, or the claimant is bankrupt.
A spokesperson from the DWP told The Sun that it makes sure repayments are affordable first and that it has recently reduced the maximum amount that can be deducted from someone’s Universal Credit claim.
They said: "Universal Credit is a better, simpler system with monthly assessments which reduce the likelihood of overpayments in future."
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What is a Universal Credit advance payment? How to apply and pay it back
Yesterday, we revealed how worryingly 120,000 Universal Credit claimants are behind on their rent, while more than 500 have been evicted from their homes.
The findings follow research from Citizens Advice that found that half of Brits on Universal Credit have fallen behind on their rent after waiting up to five-weeks for their first payment.
But how rent payments are made could be overhauled after the DWP admitted that claimants were left out of pocket because of the way the benefit is calculated.
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