Source · Select Committees · Work and Pensions Committee
Recommendation 25
25
Paragraph: 113
We welcome the announcement of the Breathing Space scheme, which is scheduled to be introduced...
Recommendation
We welcome the announcement of the Breathing Space scheme, which is scheduled to be introduced next year, and the Government’s confirmation that Advances in Universal Credit will be covered by the scheme. We find it disappointing, however, that debts in Universal Credit will be “phased in” over time rather than introduced straight away. We recommend that DWP works with HM Treasury to address any technical barriers in order to ensure that Advances are included in the scheme from its launch, so that Universal Credit claimants can benefit from the support it offers straight away.
Paragraph Reference:
113
Government Response
Not Addressed
HM Government
Not Addressed
The Department is supportive of Breathing Space and we fully recognise the need to ensure people and families with problem debt can access debt advice and identify appropriate debt solutions. To help people in problem debt get their finances back on track, the budget for free debt advice in England has been increased to over £100 million this financial year. From May 2021 the Breathing Space scheme will offer people in problem debt a pause of up to 60 days on most enforcement action, interest, fees and charges. For all benefit overpayments (including overpayments of UC), Short Term Benefit Advances in legacy benefits and Third Party Deductions in legacy benefits, it remains our intention to implement the scheme to meet our obligations from May 2021. UC Advances and Third Party Deductions in UC (for debts we manage of behalf of others) will come into the scope of the scheme once implementation of UC is complete this is due to the complexities of system development, which must be scheduled alongside other important measures. Any claimant in unexpected hardship can already request their New Claim Advance or Change of Circumstances Advance be deferred for three months and this has been the case for many years. For Budgeting Advances, this deferral can be for up to six months in cases of unexpected hardship. We have already set out that advances are not loans, the consequence being no enforcement action, interest, fees or charges would be applied to any UC claimant in any case.