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Erith and Thamesmead MP Abena Oppong-Asare ‘shocked’ at treatment of Universal Credit claimants during Coronavirus crisis

Universal Credit claimants are being denied deferrals on loan repayments to the DWP forcing them into financial difficulties during Covid-19.

In response to criticism of the five week wait claimants face for their first Universal Credit payment the DWP offers loans to help claimants during the wait, these are repaid monthly through deductions in the payment. Abena Oppong-Asare MP has criticised the DWP for continuing these deductions from payments whilst others are being offered three month loan freezes and mortgage holidays due to Covid-19.

One resident who emailed Ms Oppong-Asare for help said:

“Like many other people on Universal Credit I accepted a loan offered to me at the outset of my claim because of the several weeks delay that occurs processing claims. However, loans are subject to immediate repayment and deductions of £110.59 per month have been taken.”

The Government has recently extended the loan repayment period from 12 months to 18 months offering a slight decrease in monthly deductions. Claimants can also request a three month deferral of loan repayments to the DWP due to hardship reasons just one time.

The resident that contacted Ms Oppong-Asare said: “I requested a 3 month deferral last year because I had fallen into rent arrears as a result of the delay processing my Universal Credit claim. At that time no one would have been aware of a future worldwide Coronavirus pandemic.”

The DWP is unable to respond to specific requests for hardship reasons such as a second loan repayment deferral due to restrictions in Government policy.

Ms Oppong-Asare said:

“I am truly shocked at the treatment of my constituent during this unprecedented time. The DWP are deducting £176.68 every month from this person’s payment due to loan deductions and bedroom tax. The country is under huge pressure and the Government should be doing all it can to relieve the financial strain people will face at this time.
Families will be facing higher utility bill payments, higher grocery bills and less work opportunities during the UK lockdown through no fault of their own. The least the Government can do is freeze loan repayments and bedroom tax to ease the burden on those already facing financial difficulties.”

In October 2019, there were 2.6 million universal credit claimants, just over a third of whom were in work. Since March 16th when the Government advised that people should work from home and practice social distancing where possible, the DWP have received over 950,000 applications for Universal Credit.