Child Poverty Action Group is calling for an end to the five-week wait for universal credit (UC) in light of new data showing that 1.93 million children live in households having debt deductions taken from their UC. More than half (53%) of all children in households receiving UC are affected by these benefit deductions.
The charity is also calling for old tax credit debts to be written off, in a bid to protect families struggling on a low income.
In the worst-hit areas of the country, the proportion of all children in UC households whose parents or carers are subject to deductions is higher than two thirds. The worst affected constituencies are in the North East and North West of England, where the proportion is as high as 70% (Middlesbrough South and East Cleveland), 69% (Blackpool South and Redcar), and 68% (Middlesbrough, Wansbeck and Knowsley).
The average household is missing out on £61 a month from its UC entitlement due to benefits deductions. Deductions can be taken from benefits for a range of reasons but the most common one is for the repayment of a UC advance, which many families need to get through the five-week wait for a first UC payment. This represents £57 million a month (46% of all deductions). Another £23 million (19% of all deductions) are for historic tax credit overpayments.
Sara Ogilvie, Director of Policy, Rights and Advocacy at Child Poverty Action Group, said:
“With benefits lagging behind prices, families receiving universal credit already face an uphill struggle. The five week wait and system of debt it creates makes matters so much worse and leaves 2 million children and their families trying to get by on much less than they need, month after month. It’s a poverty trap, so government should scrap the unfair five-week wait and write off historic debts to prevent low-income families from being burdened with indefinite deductions.”
Amanda Bailey, Director of the North East Child Poverty Commission, said:
“It’s not right that almost 2 million children – including over 100,000 across the North East – are being pushed into real hardship as a result of the five-week wait for Universal Credit, with overstretched voluntary and community organisations like food banks left trying to pick up the pieces of the debt and destitution this creates. Any Government serious about levelling up living standards and opportunities for all children would put an end to this damaging policy, which is leaving low income families in an impossible position – losing significant amounts each month from an already inadequate level of support.”
Recent figures show that the government is taking back £124m in deductions from UC claimants each month. Last week the Chancellor announced that he would invest £500million over the next 6 months in the Household Support Fund to “help most vulnerable households deal with rising cost of essentials”. These figures reveal that the government will be taking nearly £750m from UC claimants through deductions over the next 6 months, £250m more than the amount it is putting into the Household Support Fund.
Child Poverty Action Group and the North East Child Poverty Commission are also calling on government to increase benefits by 8 per cent, in line with inflation, to protect hard-pressed families from being hit with a real-terms income cut.
Notes to editors:
- The regional breakdown of data, published on Wednesday in a response to a written parliamentary question by Labour MP Catherine McKinnell, is here.
- Data on average deductions and total monthly deductions, published in response to a parliamentary question on 3 March 2022, is here.
- A list of organisations who have called for benefits to be raised in line with inflation can be found here.
CPAG press office: lcorban[@]cpag.org.uk or 07816 909302.