Children in Manchester missing out on £5m a month through Universal Credit deductions

As the cost of living crisis continues to hit low-income famalies the hardest, figures released by Greater Manchester Poverty Action (GMPA) have found there are now over 134k chidren across Greater Manchester in households receiving less Universal Credit (UC) than their entitlement because of debt deductions.

Seductions can be taken from a family’s UC entitlement for a range of debts, including to utility companies, but most commonly they are for the repayment of a UC ‘advance’ a loan which many families have to take out from the government to survive the five-week wait for their first UC payment.

GMPA analysis of newly-published figures shows that, as a result of debt deductions, families across the city-region, both in and out of work are now missing out on over £5m per month.

Across the North West, families are losing an average of £75 a month from their UC entitlement. And repayment of UC advances represents half of all deductions currently being clawed back from families in the region, compared to 45% nationally.

The Government data finds that families in certain parts of the Greater Manchester area are hit particularly hard by this issue, For example 63% of children in households receiving UC in the Worsely and Eccles South parliamentary constituency are affected, and 59% of children in the Salford and Eccles constituency.

GMPA is supporting calls for:

• An end to the five-week wait for a first UC payment-as the single biffest driver of debt deductions from North West families
• A decrease in the maximum rate for deductions related to the repayment of debts, such as benefit advances and overpayments, to be set at 5% of claimants UC benefit and on overall reduction in the cap on deductions applicable to any type of debt, to 15%, down from the current 25%

Graham Whitham, CEO of GMPA said: “Families across the region have been hit hard by soaring living costs. At a time when every penny counts, it cannot be right that over 134k Greater Manchester kids are being left with much less than they need because the Government chases people for money they don’t have.

“At the very least, Government must scrap the five week wait for UC, it is trapping already low income families in debt, meaning they are having to go without the basics simply because the system is designed to work against them.”

Des Lynch, CEO at Wood Street Mission- a charity based in Manchester that supports families experiencing poverty said:” Wood Street Mission very much supports GMPA in calling fr for reform of UC with a estimated 81k children deemed to be living in poverty in the cities of Manchester and Salford, the delay i payments of this benefit, together with the current rate of deductions and overall capon deductions at 25% the whole process is contributing to making already struggling families worse off.

“Families and children across the region are struggling with a cost-of-living crisis, the last thing they need to be hit even harder.”