DWP clawed back £50million in Universal Credit loan repayments in just one month



Boris Johnson’s government clawed back £50 million one month in loan repayments from some of the poorest households in Britain.

The appalling cost of the Department of Work and Pension’s five-week wait for Universal Credit payments have been exposed by a campaigning Scottish MP.

Chris Stephens MP said he has been staggered to discover the government is reclaiming so much money in what he said is a clear sign of a flawed policy.

New claimants for Universal Credit have to wait a minimum of five weeks for their first payment to be processed, forcing many to take out loans form from the Government

The borrowing, known as Advance Payments, to cover their basic living costs before their first entitlement arrives and is then deducted from regular payments.

In response to inquiries by the Glasgow South West MP the Department for Work and Pensions (DWP) admitted that in August 2019, the latest period available, deducted £50 million from  Universal Credit claimants to pay back their loans.

Stephens, the SNP MP for Glasgow South West, said: “This is an incredible sum. The figures lay bay that the five-week policy simply isn’t working, it just drives people further into poverty.”

He added: “The DWP is removing £50 million from people each month to pay for its own ridiculous policy of making them wait weeks and weeks and weeks for Universal Credit.”

“Unless the DWP moves to a policy where benefits are paid promptly the queues for food banks in Glasgow, and across the country, will continue growing.”

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The DWP’s own figures show that in addition to the £50 million a further £44 million is being deducted to repay previous overpayments, errors, arrears, or fines, leaving all too many claimants on the brink of destitution

Food banks report that the deduction of such eye-watering sums from Universal Credit payments is behind a growing number of referrals for food parcels.

Andrew Forsey of the anti-poverty charity Feeding Britain said: “By sticking with a policy of plunging people into debt, while they are asked to wait at least five weeks for their Universal Credit, the DWP risks adding to the growing need for food banks.”

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“The DWP is mercilessly pursuing poorer households for money that has either been paid to them as a result of its own errors, or that they have been forced to borrow to keep a roof over their head. Worse still, it has no idea how many children are being driven deeper into poverty by this policy.”

A DWP spokeswoman said: “Nobody needs to wait five weeks to receive a Universal Credit payment as people can get paid urgently if they need it.”

The official highlighted that the figures for August 2019 advance repayments amounted to less than four percent of the £1.3 billion paid out and that the Scottish Government has welfare powers to top-up existing benefits.

The DWP official added: “We changed the system so people can receive even more money in the first two weeks than under the old system and in Scotland, people can choose to be paid twice monthly and have the housing element of their Universal Credit paid directly to their landlords.”

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