A mechanism allowing universal credit payments to be cut by up to 25% is driving people into poverty and debt, a report by the Lloyds Bank Foundation has found.
Cuts to benefits are often to recoup advances given during the set-up period and to settle outstanding debts – but they are not means-tested. Here, one person tells how it has affected them:
River Olivia Rose has never received the full universal credit payment that she is entitled to. “This month I got £658 – but bear in mind that £515 of that is my rent. I’m meant to get £325 a month on top of my rent but I never do,” she said.
Rose, who recently got a job for the probation service but has not yet started work, made her latest universal credit claim in November last year, and took an advance of £840 to keep her going until the first payment in January.
She had previously claimed benefits and has two lots of deductions made which seem to be related to past payments. One is to cover £3,000 the Department for Work and Pensions (DWP) said she owed for child tax credits. She says she does not know what the other is for.
Each month £35 is taken to repay the advance and £46 goes towards the two “debts” – a total of £81. Last month she had done some paid work for a charity so there was a further cut in her payment.
Rose’s rent includes household bills, but there is still food to buy and transport to pay for. She has to attend hospital appointments and said she had been forced to walk because she cannot afford the bus. “I have lost weight – I’ve gone from eight stone to six-and-a-half – I am wearing children’s clothes and they are too big,” she said.
She has been referred to a food bank twice, but can only get one more referral before the year is out. “I have got to be really vigilant about when I use it,” she said.
Rose has been through a lot. Her children do not currently live with her and cannot visit because of her housing situation. She has spent time in prison. “The deductions are a huge part of keeping you in this state,” she said.
• This article was amended on 11 May 2022. In the last paragraph, we inadvertently said “housing association” when it should have said “housing situation”. This has been corrected.
