Ministers ought to swiftly pause computerized deductions in advantages to present struggling households “breathing space” through the cost-of-living disaster, cross-party MPs have urged.
With inflation predicted to achieve 11 per cent in October — a 40-year excessive — the Commons Work and Pensions Committee stated extra should be achieved to assist claimants going through “huge financial pressures”.
Highlighting proof classes with charities, the MPs added that deductions from advantages are pushing some households into “destitution” and “leading them to depend on foodbanks”.
Deductions are taken by the Department for Work and Pensions (DWP) from folks’s advantages to repay money owed incurred by advance funds of advantages or earlier errors or overpayments by the federal government.
But MPs on the committee warned that repaying advances granted to claimants, who’ve to attend weeks earlier than a primary cost when switching to common credit score, “left many people struggling”.
“Repayments to the DWP are not subject to the same affordability assessments expected in consumer credit markets, and many families simply cannot afford these deductions from social security payments, which are already behind inflation,” they stated.
“We recommend that, as during the pandemic, repayments should be paused and only restored as the rate of inflation reduces, or when benefits have been uprated to reflect the current rate of inflation”.
MPs on the committee additionally urged the federal government to assessment and improve the profit cap — frozen since 2016 — “to ensure it is in line with average household incomes” and growing hire, vitality and meals prices.
Chair of the committee and Labour MP Stephen Timms stated: “Inflation is at a 40 year high, with spiralling energy, food and fuel prices adding to a cost-of-living crisis not seen for a generation and a bleak outlook for many families.
“Deductions by DWP from benefits are contributing to the hardship and the government should give those struggling some much needed breathing space by following its own advice to other creditors and pausing repayments until the threat of inflation recedes.”
He added: “A properly functioning social security safety net should be agile enough to respond to worsening economic conditions, but the high levels of inflation have laid bare the dysfunctional nature of parts of the system — not least that any increase in benefits is already seven months out of date when it takes effect.”
A DWP spokesman stated: “We’ve reduced the amount that can be taken through benefit deductions twice in recent years to no more than 25 per cent. We’ve also doubled the time period over which they can be repaid and claimants can contact DWP to discuss deductions if they are experiencing financial hardship.
“We recognise people are worried about the impact of rising prices, that’s why we’re providing £37 billion of additional cost of living support. This includes £1,200 in direct payments for eight million low-income households, most of whom received an initial £326 earlier this month.
“As part of our support package, we’ve also frozen energy deductions on universal credit, meaning any new request from energy suppliers for bills to be paid directly from benefits, or for an existing payment to rise, is denied unless the claimant also requests it.”