Universal Credit and Debt — [Sir Henry Bellingham in the Chair]

Part of the debate – in Westminster Hall at 3:33 pm on 5th June 2019.

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Photo of Karin Smyth Karin Smyth Labour, Bristol South 3:33 pm, 5th June 2019

It is a pleasure to serve under your chairmanship, Sir Henry. I also wanted to mention childcare payments, but I will write to the Minister separately and concentrate my remarks on tax credit debt.

Three weeks ago, I was told in an answer to a parliamentary question that 255,000 claimants—one in six universal credit claimants—had received a deduction for alleged historical tax credit overpayments. Last week, in widely reported coverage, Citizens Advice stated that the figure was actually 410,000, which is closer to a quarter of all claimants. Will the Minister clarify that point and say which figure is most accurate? Even the lower figure of a quarter of a million overpayments and the associated debt, as a result of problems within HMRC that are perhaps years old or involve arbitrarily fixed rates that do not reflect people’s wider circumstances, are a real problem. Crucially, many people do not know that they can challenge that overpayment, and its impact is considerable.

I urge the Minister to put in place a new minimum repayment threshold for all non-fraud overpayments or other DWP debt. That threshold should genuinely reflect living costs and not discourage claimants from seeking work. There must be flexibility to consider individual circumstances, and claimants should be encouraged to complete income and expenditure forms, and only be asked to pay what they can afford. No family should ever receive less than their standard allowance or be worse off in employment, and no family should be forced into greater debt by the actions of the DWP.