A woman on Universal Credit says she is left with just £143 to live on and can only afford to eat two or three meals a week because of automatic deductions being taken from her benefits. River Olivia Rose is one of millions of people having their benefits automatically deducted to pay off debts.
River, 41, has been claiming Universal Credit for 18 months and her allowance should be £324.84 a month. However she says she has never received this full amount due to deductions.
She told the Mirror she receives between £90 and £260, with the amount fluctuating each month. The deductions are linked to an advance loan she took when she first signed up to the six-in-one benefit to cover the five week wait for her first payment.
They are also for child tax credit overpayments and a fine she received for sleeping in her car while homeless. She says she been told she owes £3,000 but is struggling to get answers.
River, from Leeds, said: “This month I have just £143 to live on. The DWP claim I owe £3,000 altogether, but I have no idea where they have obtained this information from. I’ve queried it so many times, but have been told they cannot discuss it over the phone.
"The deductions just show up on my online journal statement. I called them to say I can’t afford it but they decided to take it anyway."
River, a charity volunteer, said she borrows money from friends and family who are already struggling themselves in order to get by. She said the deductions mean she had to walk two hours to get to a library to pick up sanitary towels because she cannot afford to buy them.
She said: “Deductions don’t help me find a job, and really impacts on my mental health,” she said. I walk everywhere because I can’t afford travel costs, I’m exhausted.
“I’m lucky if I eat two or three meals a week. I’ve lost so much weight I fit into children’s clothes. I use foodbanks, but you can only use the food bank three times a year. I can use it one more time this year.”
River is due to start a new job in the coming months - but says that she is still scared about what will happen next with the cost of living crisis.
Campaigners are calling for the the Department for Work and Pensions (DWP) policy to be put on hold to help people during the cost of living crisis. A recently published report said 2 million people are having money deducted from their benefits.
What are benefit deductions?
Deductions are payments that the DWP has the power to automatically take from benefit payments to pay off debts owed to the government. This can include from loans such as advance payments, errors and historic benefit overpayments as well as some third party debts (e.g. utility bills and rent arrears).
Charity says deductions making it harder for people to make ends meet
As living costs skyrocket, the DWP continues to deduct money from 2 million people, according to figures in a report published today by Lloyds Bank Foundation. The charity is calling for an immediate review of automatic deductions in order to help those most in need with the cost-of-living crisis.
Its ‘Driver of Poverty’ report said the deductions are confusing, unmanageable, and forcing people into hardship, often through no fault of their own. Almost half (44%) of those receiving Universal Credit have money automatically deducted, with an average of £78 per month taken out, according to the report.
Research also shows that those with deductions are also around twice as likely to have gone without food, toiletries and utilities as those on Universal Credit without deductions. Before receiving Universal Credit, claimants face a five-week delay with no benefits, forcing them to take an advance to cover the cost of essentials.
This is then repaid through deductions in their subsequent payments, leaving many trapped in a vicious cycle of repayments. The Lloyds report also showed almost half (47%) of those referred to a foodbank were receiving lower levels of benefits as a result of deductions.
Lloyds Bank Foundation is calling for an urgent review of how Universal Credit deductions are managed. It said advance payments should be converted into grants or deductions should be capped at 5%.
It added that any deductions should be subject to an affordability check by a qualified advisor. Meanwhile historic ‘debts’ that stem from government administrative errors, particularly for tax credits, should be wiped, it says.
Paul Street, chief executive of the Lloyds Bank Foundation: “At a time when the cost-of-living is soaring, the Government itself is making it harder for people by deducting significant sums from benefits, making it even harder for people to make ends meet. The deductions system is clunky and not fit for purpose, pushing people deeper into poverty through no fault of their own.
"Charities every day see people have significant sums deducted from their benefits that they don’t understand, without warning and that doesn’t take account of their circumstances, leaving them struggling to pay their bills however well they budget.”
What the DWP says
The Department for Work and Pensions said the majority of overpayments arise because claimants are late in reporting a change of circumstance. It insisted that anyone unable to afford the rate of recovery proposed should contact the DWP so an affordable rate of repayment can be negotiated.
A Government spokesperson said: “We carefully balance our support for claimants with our duty to protect taxpayers money so we have further reduced the cap on Universal Credit deductions and paused the Fuel Direct scheme, that allows energy bill payments to be taken directly from benefits. Safeguards are in place to ensure deductions are manageable and customers can contact DWP to discuss their repayments if they are experiencing financial hardship.
“We know work is the best route out of poverty so we’re putting an average of £1,000 more per year into the pockets of working families on Universal Credit and have also boosted the minimum wage by more than £1,000 a year for full-time workers."
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