Published On: Sat, Nov 21st, 2020

Universal Credit: Tax credit debt must be ‘written off’ as claimants lose THIRD of payment | Personal Finance | Finance

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Key changes are needed in the Universal Credit system to make sure “as much money is going into people’s pockets as is possible”, a campaigner has warned. Cathy Warren, manager at 38 Degrees, spoke to the Daily Express about the dangers of tax credit debt. She explained how many people are at risk of losing as much as a third of their benefit payments due to “errors in the tracking”.

Ms Warren told “I think the Lords committee report covers quite a lot of the core parts of the changes that need to be made.

“I think one is to cancel the tax credit debt.

“So many people owe the Government money on tax credit through no fault of their own due to errors in the tracking.

“That means people can lose a third of their Universal Credit payment.”

READ MORE: Universal Credit warning: DWP ‘actively reviewing’ changes to benefit

She continued: “The Government tries to take back that debt through Universal Credit.

“So that means what is already a small payment becomes two-thirds of a small payment.

“So writing off that tax credit debt is a really, really key change.

“Making sure as much money is going into people’s pockets as is possible.”

Ms Warren added: “There is no doubt everyone is feeling the effects of the coronavirus pandemic.

“But our research shows those on Universal Credit are the ones who are really struggling, and will continue to feel the knock-on effects of the economic crisis.

“Universal Credit just isn’t providing them with the level of adequate money needed to cover the basic day to day living costs, and it is extremely concerning that families are having to cut down on food and skip meals just to try and make ends meet.

“The House of Lords Economic Affairs Committee has already found Universal Credit not fit for purpose in its current form and has led to an unprecedented number of people not being able to pay their rent and having to rely on food banks.

“We are calling on Government to do the right thing and review the current system, to make the current £20-a week boost permanent, reduce tax credit debt and ultimately support some of the some of the most vulnerable in society at a time of crisis.”

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