The welfare debt trap: Adjusting the level and priority of deductions from benefits to prevent hardship

The welfare debt trap: Adjusting the level and priority of deductions from benefits to prevent hardship 422 KB

The majority of deductions from benefits are for money owed to the Department for Work and Pensions itself. Evidence shows that the deductions applied are pushing people into hardship and driving them to access crisis support.

Deductions are taken in priority order, with those for advance payments taken first. This sits at odds with the debt prioritisation process, where debts are ranked according to risk and places repaying DWP over things like court fines and rent arrears

In the short term, three simple changes would make a big difference:

All DWP debts should be consolidated and capped at the same 5% as most third party deductions.

Changing the priority order so claimants first have deductions taken for debts where non-payment would have the most serious consequences.

Ending the practice of reclaiming money overpaid due to DWP mistakes.

Survey

Please fill in our survey to give your feedback on our policy pages. Your responses will help us continue to improve how we present policy research and data on our website.