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Free For All on Claimant Cash

Universal Credit, the government’s one-stop-shop benefit for most working age claimants, risks becoming a free-for-all for creditors reclaiming debts, money advisers warn.

Under the previous system, fines, overpayments, rent arrears, debts for gas, electricity and water, and benefit advances were claimed from different payment pots. Where UC gathers six of the old benefits and makes one monthly payment, debts can be recovered direct from one source. Claimants are being left with almost nothing to live on.

StepChange debt charity discovered that 1.1 million claimants have ‘Third Party Deductions’ (TPD) taken direct from their benefits. More than a quarter of everyone turning to them for advice has suffered TPD.  StepChange say claimants are forced to skip meals, turn off their heating or borrow more. Many landlords are having to step in to provide advice and support.

Pointing out people with mental health issues are at greater risk, Jeannette Gustafson at Halton Housing said:

“As UC is paid as a lump sum ‘all in one benefit’ the customer can then get much less than they were expecting causing budgeting issues.”

Often deductions start with little or no notice to the claimant, so they do not have time to seek advice.

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