Deductions from benefit 'causing great hardship'

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The Independent Online
(First Edition)

PEOPLE on benefit are suffering 'intolerable hardship' because of the level and range of deductions that can be made from their weekly payments, the National Association of Citizens' Advice Bureaux said yesterday.

A system with many merits allowing fuel, water, rent and other bills to be paid directly out of benefit is now having harsh consequences for some claimants because the safeguards built into the system are not working, the association said after a survey of 215 citizens' advice bureaux.

Nearly one in five of those on income support just under 1 million claimants now have at least part of their weekly benefit deducted to pay gas, electricity or water debts, housing and poll tax arrears, overpayments made by the Benefits Agency or loans from the social fund.

One-third of those making such payments have an average of pounds 15.99 a week deducted the income support rate for a couple is pounds 69 a week and 31,000 have more than three deductions adding up to an average of more than pounds 25 a week.

The association yesterday quoted the case of a single parent with a nine-year-old in Yorkshire on pounds 73.60 a week who is having pounds 21.87 deducted for electricity, gas, rent and poll tax arrears, for water and sewerage charges and for a social fund repayment. In Hampshire, a lone parent with a four-year-old has been left with pounds 37.15 a week to live on after deductions of pounds 33.80 for electricity, gas, water and social fund repayments, while a single 23-year-old was having pounds 17 of his pounds 34.80 deducted.

'The growth of deductions has led to an intolerable situation where people are left with impossibly small amounts to feed and clothe themselves and their children,' Ann Abraham, chief executive of the association, said. Spiralling bills for water and for fuel, once VAT is added, would make the situation worse unless income support was raised. The scheme is meant to have safeguards ensuring that claimants still have enough to live on. But while there is in theory an overall limit for deductions, in practice other amounts can be compulsorily deducted on top.

A system of direct payment of bills through the Benefits Agency was a good idea, the association said. 'But it cannot work effectively against a background of basic levels of benefit so low that debt becomes a way of life'.

The association said the first requirement is a review of the 'inadequate' level of income support followed by reforms to make the system work more like direct debits.

Grants should be restored in place of loans for essential items and an overall limit of about 10 per cent of income should be set for deductions, with the cash distributed pro rata to creditors. Claimants should also be allowed to opt for direct deductions, allowing them to avoid getting into debt in the first place.