Public debt, such as Universal Credit advances, has been causing significant issues for vulnerable families, according to experts. Professor Morag Treanor’s research has shed light on how low-income families are impacted by public debt and arrears, particularly when receiving social security payments.
These families often find themselves in a cycle of debt repayment, including payments for council tax, school meals, rent, and deductions from their entitlements by various companies. Professor Treanor highlighted that government debt collection practices are often harsh and punitive, leading families deeper into poverty.
One major factor contributing to public debt is the mandatory five-week wait for Universal Credit claims to be processed. This wait can push families to take out Universal Credit advances or other loans to cover essential expenses. However, the repayment of these advances can put a strain on household budgets, forcing many to rely on food banks or go without food.
Calls have been made to abolish the five-week wait for Universal Credit payments or to convert the advance payment into a grant that does not need to be repaid. Additionally, it has been suggested that Universal Credit needs to be increased to a level that allows families to meet their basic needs without falling into debt.
Research has shown that around 80,000 families in Scotland receiving Universal Credit are facing reductions in their incomes to repay debts to public bodies. Furthermore, school meal debt exceeding £1 million is owed by nearly 25,000 low-income families who do not qualify for free school meals.
Various organizations and experts are urging government intervention to address the debt crisis faced by low-income families. They are calling for fairer public debt recovery processes, an end to the five-week wait for Universal Credit, and measures to prevent families from falling deeper into poverty due to debt. Recognition of the impact of domestic abuse on debt liability and the need for local authorities to support families in finding suitable accommodation despite rent arrears are also important aspects to consider in tackling this issue.
