Recommendation 7

The people that are being overpaid and underpaid are amongst those least likely in society to be able to pay the money back or absorb an underpayment. The nature of means tested benefits means people entitled to receive the benefits are already those in society with the lowest incomes and savings. Even within this group, those with the least are affected the most by having to repay debts: for instance, Universal Credit claimants with the lowest incomes face larger deductions to repay debts (including advances) applied to their first Universal Credit payment. These deductions can be substantial and are more likely to be so for low income claimants; 45% of Universal Credit claimants on low incomes have 20% or more of 8 Department for Work and Pensions Accounts 2019–20 their personal allowance deducted in the first assessment period, compared to 27% across all claims. Recommendations: The Department should do more to understand the impact that both overpayments and underpayments have on claimants and ensure that vulnerable claimants are treated with care when dealing with error on the claim. As the Department investigates the impact of its COVID-19 response, it should consider systemic causes of underpayment and act quickly to assess and address these issues. We would like to hear from the department how it intends to do this. Department for Work and Pensions Accounts 2019–20 9 1 Background and the Department’s response to COVID-19