Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what assessment he has made of the potential merits of (a) suspending deductions and (b) implementing a grant in lieu of advances during the five week wait for receipt of universal credit.

Nobody in need has to wait for a payment under Universal Credit (UC). UC New Claim Advances allow eligible claimants to receive up to 100% of their estimated Universal Credit payment upfront. Claimants will receive their annual award over 13 payments during their first year, instead of 12. These upfront payments can be spread across two years instead of one from October 2021, as announced in the 2020 Budget. New Claim Advances are not loans. They are the claimant’s benefit paid early, which is then recovered over an agreed period.

The Department’s deductions policy strikes a fair balance between a claimant’s need to meet their financial obligations and their ability to ensure they can meet their day-to-day needs. Since October 2019, Universal Credit deductions are a maximum of 30% of a claimant’s standard allowance down from 40% previously. We also recognise the importance of safeguarding the welfare of claimants who have incurred debt, so last resort deductions over the 30% cap can be applied to protect vulnerable claimants from eviction and/or having their fuel supply disconnected, by providing a repayment method for arrears of these essential services.

The main aim of the deductions policy in Universal Credit is to safeguard the welfare of claimants who have incurred debt in a cost effective and efficient way. It provides protection for claimants from the consequences of homelessness, imprisonment or having vital utilities disconnected. Regulations protect claimants from excessive deductions and there are no plans to suspend them.