Tuesday, December 01, 2020

The Government are the Loan-Sharks

 It is now more common for people using food banks to be in debt to the government than to family and friends or payday loan companies, the Trussell Trust has said. The UK’s biggest food bank network said half of all households visiting food banks struggled to afford essential goods such as food and clothes because they were repaying universal credit debts. The organisation said monthly deductions taken from claimants’ payments – in most cases to pay back a universal credit advance loan – could reduce household incomes by up to a third.

The most common deduction made by the Department for Work and Pensions is made in repayment of advance loans issued to tide claimants over during the minimum five-week wait for a first universal credit payment. Deductions are also made for benefit overpayment errors.  About 1.3 million new claimants were issued with advances between March and June.

“Our welfare system should increase people’s security, not suffering. But right now the government is taking money from the benefit payments of many people using food banks,” said the trust’s chief executive, Emma Revie. “Taking money off payments to repay these debts makes it much harder for people to afford the essentials and can impact on people’s mental health – this isn’t OK." Revie continued, “With the pandemic continuing to hit people’s incomes, the government must pause taking money from benefit payments over the winter months until a more responsible and just system that offers security and support is in place. This would help people on the lowest incomes to keep every penny of their benefits to help afford the absolute essentials, instead of needing to turn to a food bank for help.”

UK food bank trust says half of users repaying universal credit debts | Universal credit | The Guardian

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