THE government must pause benefits deductions to give struggling households vital breathing space during the cost-of-living crisis, MPs urged today.

Automatic payments to the government and others taken out of people’s benefits should be halted as claimants battle soaring costs, the work & pensions committee said.

Deductions are taken by the Department for Work & Pensions (DWP) from people’s benefits to pay off debts, which could include advance payments of benefits and previous errors or overpayments of benefits by the government.

New universal credit applicants face a five-week wait while their claim is assessed before receiving their first payment. If they need advance payment to help them while they wait, this will be deducted from the amount they receive each month.

Deductions can also be taken to cover some third-party debts, such as rent arrears.

Committee chairman Sir Stephen Timms said: “Deductions by DWP from benefits are contributing to the hardship, and the government should give those struggling some much-needed breathing space by following its own advice to other creditors and pausing repayments until the threat of inflation recedes.”

Poverty Alliance director Peter Kelly said it was a huge injustice for people to face benefit deductions at the time of a crisis.

The group’s research of universal credit claimants in Glasgow revealed that many experienced high levels of stress and financial insecurity due to deductions, which were often managed alongside other debts.

“The UK government should immediately reduce the maximum cap on universal credit debt deductions from 25 per cent to 15 per cent and put a maximum cap for state debt deductions at 5 per cent,” he told the Star. 

“That will at least give more space to people and protect households from the threat of destitution.”

Linda Burnip of Disabled People Against Cuts said that deductions “help to increase poverty and destitution both for disabled, older and all other recipients.

“Now that inflation is running at 11 per cent, it is vital that such deductions are scrapped, leaving people with the full amount of money they are entitled to receive.”

Centrepoint director of policy Balbir Kaur Chatrik said that with Parliament in recess and a new prime minister yet to be decided, it is “impossible to see how these urgently needed interventions can be acted upon in time for some of the most vulnerable.”

“At a time when young people tell us they are skipping meals and living without power in their homes it seems absurd in the extreme that some of them have been forced into this by the government clawing back up to a quarter of their universal credit payment, particularly when they are already struggling,” she said.

A DWP spokesman said the department has already reduced the amount taken through benefit deductions and doubled the time in which they can be repaid.