Half of households in Scotland relying on Universal Credit have suffered deductions in their benefit payments, figures show.
Almost half of the £11.3 million taken in one month this year was to repay upfront loans that claimants are forced to take out from the Department for Work and Pensions (DWP) while waiting five weeks for their first UC payment.
Chris Stephens, the SNP MP who uncovered the data, branded it a "poverty tax" that saw 188,000 households across Scotland lose £60 on average.
He wants the DWP to issue grants to new claimants instead of them being forced to take out upfront loans.
Cash can also be deducted from claimants if they receive overpayment in error.
Stephens discovered the scale of the deductions system after submitting a written question to the UK Government.
The MP for Glasgow South West said: "My constituents are among the hardest hit by this cruel poverty tax being imposed on them by the UK Government.
"To have £60 each month deducted from an already low subsistence benefit leaves people unable to heat or eat, let alone choose between one or the other.
"The replacement of upfront loans with grants would get to the root cause of these deductions and, in doing so, help to reduce the need for food banks in Scotland".
Andrew Forsey, national director of the Feeding Britain charity, which operates the Good Food Scotland programme, said: "If he was to reduce significantly the rate of deductions from Universal Credit, the Chancellor would give an immediate financial boost to people on very low incomes at almost no longer-term cost to the Treasury."
Stephens submitted a written question to the UK Government asking how many Universal Credit claims were subject to deductions in the most recent month for which data was available.
Guy Opperman, the UK minister for employment, said in his response: "Since April 2021, we have reduced the normal maximum rate of deductions in Universal Credit from 40 per cent to 25 per cent of a claimant’s Standard Allowance. These positive measures were put in place to support claimants.
"The Government recognises the importance of supporting the welfare of claimants who have incurred debt.
"We seek to balance recovery of debt against not causing hardship for claimants and their families. Processes are in place to ensure deductions are manageable, and customers can contact DWP Debt Management if they are experiencing financial hardship, to discuss a reduction in their rate of repayment or a temporary suspension, depending on their financial circumstances.
"Advances are a claimant’s benefit entitlement paid early, allowing claimants to access 100% of their estimated Universal Credit payment upfront.
"They ensure nobody has to wait for a payment in Universal Credit and those who need it are able to receive financial support as soon as possible.
"Claimants can receive up to 100 per cent of their estimated Universal Credit award if required, resulting in 25 payments over a 24-month period. This is not a debt."
A UK Government spokesperson said: "We have reduced the amount that can be taken through deductions twice in recent years to no more than 25 per cent, doubled the time period over which they can be repaid and stopped utility companies from being able to increase payments automatically given the rise in energy bills
"This balances people keeping the significant proportion of their payment with making sure priority debts are paid, such as child maintenance.
"We recognise people are struggling with rising prices and we are protecting millions of those most in need with at least £1,200 of direct payments and providing all households with £400 towards energy costs this year. The Chancellor last week announced a further extensive cost of living package, ensuring those most in need are supported next year as well as this."
To sign up to the Daily Record Politics newsletter, click here.
