DWP claimants could lose £750 a year amid automatic deductions

The New Economics Foundation has warned that the deductions, meant to repay debts including emergency advance payments and previous overpayments from the DWP, have cut basic Universal Credit payments

Millions of Universal Credit recipients across the UK are being left over £700 poorer each year, on average, due to automatic deductions from their payments. The startling figures indicate that the average claimant misses out on around £63 monthly, adding up to £756 across a year, effectively losing £1 for every £13 entitled.

According to the New Economics Foundation, these deductions, which aim to repay debts such as emergency advance payments and historical overpayments by the Department for Work and Pensions (DWP), have resulted in an 8 per cent decrease in the basic Universal Credit payouts.

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Speaking to the Sun, benefits expert Connor Lawlor from the charity Turn2us commented: "These debts can accrue in several ways, including for Universal Credit and other benefit overpayments (even if the overpayment was made in error by DWP), benefit advances and recovering hardship payments."

He also highlighted that: "The DWP can also deduct on behalf of third parties if a claimant is in debt to them, including for rent and service charge arrears, council tax arrears, court fines, child maintenance, and for utilities like electricity, gas and water."

Nearly a million households have seen deductions due to budgetary advances intended to offset past emergency expenses, while 730,000 have repaid an advance from DWP covering the five-week wait for their initial Universal Credit payment.

Additionally, 640,000 homes have seen cuts due to tax credits previously overpaid by HMRC, and numerous other claimants have suffered reductions for various other reasons.

Turn2us advises to seek debt advice swiftly before contesting or agreeing to any DWP deductions. Mr Lawlor said: "The benefit office should write to give reasons why deductions are taking place."

"If not, the claimant should request this." He added: "For example, it is possible to dispute an overpayment, but a claimant should be able to provide the necessary evidence to prove why they think they haven't been overpaid a benefit or don't owe a debt."