More than 206,000 households on Universal Credit in Scotland have been hit by deductions in recent months.
Between December and February 2023, some £12.1million was deducted from claimants with the average household seeing their payment slashed by £59.
Almost half of the deductions were to repay a Universal Credit advance, which is when a claimant requests part or all of their entitlement as a loan, to cover the five weeks until their first Universal Credit payment arrives.
SNP MP Chris Stephens obtained the figures and branded the deductions a “poverty tax”, calling on the Government to slash the rate of reductions.
The Glasgow South West MP said: “It’s one thing for ministers to say they’re helping people on the lowest incomes with cost of living payments, but the monthly deduction of £59 from Universal Credit payments pushes those very same people deep into financial hardship.
“The poverty tax remains a prominent driver of food bank usage and needs to be done away with.
“There should be an amnesty on deductions resulting from the DWP’s own errors, a replacement of upfront loans with grants, and a much lower cap on the monthly rate of deductions.”
The three worst hit areas were all in Glasgow. Around £375,000 was taken from 6,400 claimants in Glasgow East, with an average deduction of £59.
A total of £334,000 was deducted from claimants from 5,900 people in Glasgow North East, with an average deduction of £57.
In Glasgow South West, £331,000 was taken away from the payments of 5,700 people with an average deduction of £58.
Deductions for a Universal Credit advance begin being taken with the person’s first payment. People usually have to repay the amount within 24 months if it was taken out due to making a new claim for Universal Credit.
Claimants have six months to repay the amount if they requested an advance due to a change of circumstances.
A UK Government spokesperson said: “Deductions help to protect claimants from enforcement actions such as eviction, ensure priority debts like child maintenance are addressed and recover money when overpayments are made.
“It is only right that we balance our duty to the taxpayer but affordable and sustainable safeguards remain in place.
“Any claimant having difficulties with repaying a benefit overpayment, can speak to the department and agree a rate of repayment that is more affordable for them.”
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