Bishop of Durham asks about debts and universal credit

The Bishop of Durham received the following written answers on 5th September 2022:

The Lord Bishop of Durham asked Her Majesty’s Government what assessment they have made of the effect of government debt deductions on Universal Credit recipients’ ability to afford essential items; and what steps they are taking to prevent debt deductions contributing to destitution as the cost of living increases.

Baroness Stedman Scott (Con): The Department has not made an assessment. However, DWP takes every care to recover benefit debt without causing undue financial hardship.

To that end we have lowered the standard cap on deductions from Universal Credit twice over recent years, firstly from 40% to 30% in October 2019 and then to 25% in April 2021.

We also ensure that any deductions are taken in priority order, which effectively means that higher priority deductions, such as utilities payments, are taken first, with debt only taking up the balance of the overall cap.

Where a person feels they cannot afford the proposed rate of recovery, and the debt has not arisen as a result of fraud, they are encouraged to contact us. When they do, we work with them, reviewing their financial circumstances and in most instances, agreeing a temporary reduction in their rate of repayment. We have recently extended the time period for any reduced repayment of this type to remain in place.

In exceptional circumstances, the Department does have discretion to waive recovery of debt. Guidance on this can be found in full at Chapter 8 of the Benefit overpayment recovery guide, on the GOV.UK website, which was updated in 2022 to ensure that all appropriate factors are taken into account when a case is being considered for waiver.

In recognition of the financial pressures people are currently facing the Government is providing over £15bn in further support, targeted particularly on those with the greatest need. This package is in addition to the over £22bn announced previously, with Government support for the cost of living now totalling over £37bn this year.

Hansard


The Lord Bishop of Durham asked Her Majesty’s Government what support they are providing to Universal Credit claimants who are in debt to become debt free.

Baroness Stedman Scott (Con): DWP staff provide benefit and employment support across Great Britain through our national network of Jobcentres, who work in partnership with a variety of organisations that offer local budgeting and debt advice support.

The Government is keen to ensure that everyone accesses the benefits they are entitled to, which is why we have just launched an eligibility checker that can be found on the GOV.UK website. DWP also funds the Money and Pensions Service that provides additional support to help people, particularly those most in need to improve their financial wellbeing. It provides access to high-quality money and debt advice through its Money Helper services and signposting to third party organisations best placed to help.

Hansard

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