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7 January, 2021 Open access

Benefit deductions for debt can more than offset the £20 ‘uplift’ to universal credit, sending families deeper into poverty

Covid Realities research programme calls on government to write off historic tax credit overpayments and convert advances to non-repayable grants

Benefit deductions for debt can more than offset the £20 'uplift' to universal credit, sending families deeper into poverty, according to a new report from the Covid Realities research programme.

In Advance to debt: Paying back benefit debt - what happens when deductions are made to benefit payments?, the report's authors - Dr Ruth Patrick from the University of York and Tom Lee, Senior Policy Analyst at the Child Poverty Action Group - point out that deductions can be taken from benefit payments for a range of reasons including repayment of universal credit advances, legacy benefit overpayments, budgeting loans, rent arrears, utility bills and mortgage interest. While the government temporarily paused recovery of benefit overpayments in April 2020 in response to the Covid-19 pandemic, this did not apply to recovery of advance payments and, in any event, all recovery was recommenced in July 2020.

Highlighting that, 'inevitably and unsurprisingly', debt deductions push families further into debt, the report sets out that - 

As a result, while agreeing with the many calls to maintain the £20 'uplift' and extend it to legacy benefits, the report also says that there is a parallel and equally urgent need to look at the impact and reach of debt deductions, and it therefore calls on the government to - 

For more information, see Advance to debt: Paying back benefit debt – what happens when deductions are made to benefit payments? from covidrealities.org