Deductions: Drivers of Poverty

Deductions are impoverishing individuals and families against a backdrop of low incomes, rising living costs and widening inequalities during Covid.

Deductions are payments that DWP automatically takes out from benefit payments to pay off debts owed to government from loans such as advance payments, or errors and historic benefit overpayments as well as some third party debts (e.g. utilities bills and rent arrears). They are primarily the explicit result of Government policy, not individual behaviour, and contribute to undermining the Government’s objectives, especially on Universal Credit.

The charities the Lloyds Bank Foundation supports raised concerns over welfare deductions and their impact on people facing complex social issues. They produced this report to bring together a range of evidence and research to highlight the issue and present a case for reform.