2.3 million children in households receiving less universal credit than they’re entitled to

Call to change deductions policy that ‘pursues families for money they haven’t got.’

As more families migrate from older benefits to universal credit, new official figures show there are 2.3 million children in households on universal credit (UC) which are having debt deductions from their benefit, forcing them to live on significantly less than their entitlement. The DWP can make deductions from UC for a range of debts, including to utility companies, but the figures show 45% of deductions are for repayment of UC advances. Most advances are taken out by claimants to get them through the five-week wait for a first UC payment.

Of all children in UC households, around half (51%) are in households with debt deductions and the average per-household monthly deduction is £74 according to the figures (totalling £84 million per month or £1 billion a year) across Britain.

As more families move to UC and living costs remain high, Child Poverty Action Group is calling on Government to change the deductions rules to prevent more children from going without the support they need. The charity wants the DWP to reduce the overall cap on deductions (for any type of debt) from the current 25% to 15% of a claimant’s benefit. This cost-neutral intervention would mean that couple-families with children who are having deductions could receive up to £58 more of their entitlement each month. Single parents with deductions could receive up to £37 more of their entitlement.*

Chief Executive of Child Poverty Action Group Alison Garnham said:

The DWP’s deductions policy pursues the worst-off families for money they haven’t got – forcing down their incomes from an already inadequate level of support, just when costs are high. It’s particularly unjust that debts are often because of the five-week wait for a first universal credit payment – an impossible stretch for the many families who have no savings buffer. The DWP must reduce the deductions rate now before more children’s lives are damaged.

Notes to editors: The figures are compiled from these parliamentary answers: https://questions-statements.parliament.uk/written-questions/detail/2023...  and https://questions-statements.parliament.uk/written-questions/detail/2023...

* These amounts are based on how much more of their UC entitlement a family subject to a 25% deduction would receive if the deduction cap was lowered to 15%.

For example, the standard UC allowance for a couple aged over 25 is £578.82 a month. The maximum deduction they can face under the current rules is £144.71 a month. If the cap were lowered to 15%, the maximum deduction would be £86.82 a month. An affected couple with children could receive £57.88 per month more of their entitlement if the deduction cap were lowered from 25% to 15%.

Media contact: Jane Ahrends 07816 909302.