The DWP has been accused of ‘harsh’ treatment as new figures show that one in three recipients of Universal Credit have had their benefits docked in the past two years
Universal Credit claimants are reeling from a £60 cut in their payments, as the Department for Work and Pensions (DWP) faces backlash for its “harsh treatment” and aggressive debt recovery tactics. The Money and Mental Health Policy Institute, established by telly favourite Martin Lewis, has criticised the DWP’s policy of reclaiming 15% from monthly Universal Credit payouts when overpayments occur.
For those aged 25 and above, this clawback can mean a hefty £60 gone each month – a serious hit amidst the cost of living squeeze. Claimants are blindsided with scant notice, receiving only a brief letter and online message that reads: “You have been paid more Universal Credit than you are entitled to. This will now be taken back.”
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Mr Lewis’ charity has highlighted the DWP’s lack of clear communication regarding repayment negotiations. One distressed claimant shared their ordeal: “Having money deducted from my benefits has made it difficult for me to make ends meet and some days I have been not eating because I can’t afford to, which is leaving my mental health in tatters.”
Helen Undy, head honcho at the Money and Mental Health Policy Institute, drew parallels between this issue and the notorious Carers’ Allowance debacle, slamming the Government’s approach to benefit overpayment.
She stressed: “You have been paid more Universal Credit than you are entitled to. This will now be taken back. Having money deducted from my benefits has made it difficult for me to make ends meet and some days I have been not eating because I can’t afford to, which is leaving my mental health in tatters.”
“The Government’s harsh treatment of people who’ve been overpaid benefits is reminiscent of the Carers’ Allowance scandal,” she added. The issue of Universal Credit overpayments has come under scrutiny, with many recipients finding themselves unfairly penalised due to errors not of their making.
One expert highlighted the harsh reality for those affected: “When people are paid more in Universal Credit than they are entitled to, it’s often through no fault of their own, and sometimes the first they know of it is when the government takes sudden and brutal steps to claw those payments back.”
The financial strain on individuals is palpable, as they explained: “Many people we work with are already running out of money for food before the end of the month, suddenly taking £60 from what they have left plunges them into further financial hardship and needless distress.”
Calls for reform are growing louder, with a push for fairer treatment in debt recovery: “The Government has pledged to overhaul how it reclaims Carers’ Allowance, now it needs to do the same for how it collects Universal Credit overpayments. Above all, that means proactively giving people a real chance to negotiate a payment plan that they can actually afford, instead of just taking money out of people’s income with barely any warning.”
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There’s also a demand for consistency in debt collection practices across the board: “We’d also like to see better standards applied across all government debt collection. It cannot be right that the state is lagging far behind the standards that consumer creditors have to meet in treating people fairly and with respect if they fall behind on payments.”
In response, a DWP spokesperson assured that the department is committed to helping those struggling with repayments by agreeing to affordable plans, reports Birmingham Live. They stated: “We have introduced a new Fair Repayment Rate, which caps debt repayments made in Universal Credit at 15%, allowing 1.2 million households to keep more of their Universal Credit.”
“When people are paid more in Universal Credit than they are entitled to, it’s often through no fault of their own, and sometimes the first they know of it is when the government takes sudden and brutal steps to claw those payments back. Many people we work with are already running out of money for food before the end of the month, suddenly taking £60 from what they have left plunges them into further financial hardship and needless distress,” it explained.
“The Government has pledged to overhaul how it reclaims Carers’ Allowance, now it needs to do the same for how it collects Universal Credit overpayments. Above all, that means proactively giving people a real chance to negotiate a payment plan that they can actually afford, instead of just taking money out of people’s income with barely any warning.”
“We’d also like to see better standards applied across all government debt collection. It cannot be right that the state is lagging far behind the standards that consumer creditors have to meet in treating people fairly and with respect if they fall behind on payments.”
They concluded: “We have introduced a new Fair Repayment Rate, which caps debt repayments made in Universal Credit at 15%, allowing 1.2 million households to keep more of their Universal Credit. Our new Fraud Bill will help us to identify overpayments at the earliest stage so we can help prevent people falling into debt, and to do so in a way that is fair and proportionate.”