The DWP suspended recovery of certain debts for three months. This was a temporary measure due to the Coronavirus outbreak. The announcement was made on 3rd April 2020 and was in place until 5th July 2020.
The DWP moved staff from other departments to help with claims processing due to the surge in claims (the BBC reported on 9th April 2020 that 1.2 million claims had been made for UC in the previous 2-3 weeks).
On 6 July 2020 an email from the Communications Directorate at the Department for Work and Pensions confirmed the debt recoveries were recommencing. The email stated:
'Customers who previously paid by Direct Debit will receive a letter in advance of payments recommencing, giving details of the new request Debt Management has sent to the bank. We will also write to all customers who previously repaid through deductions from wages, giving them the opportunity to set up an alternative repayment plan. All other customers will be notified by letter or Universal Credit journal entries, that are issued when deductions are taken from benefit, or repayment of a debt is due to start.'
The DWP also stated that people who are experiencing 'real financial hardship' can request deferral of repayments by contacting the Debt Management line on 0800 916 0647.
Which debts were being suspended?
Deductions from Universal Credit, DWP legacy benefits (ie IR-ESA, IB-JSA and Income Support), and agreed repayment plans of the following debts were suspended:
Overpayments of benefits
Social Fund loans
Tax Credit debts
Eligible Loan Deduction Scheme
NOTE: This did not include debts recovered by a Local Authority from an on-going HB award, or by HMRC from an on-going Tax Credit award.
Why did the DWP suspend some deductions?
A government announcement said:
'The change means many claimants will see an increase in the amount of money they receive in benefits during the outbreak.
It will also allow the department to move a significant number of staff to front line roles, so it can focus on getting money to those who need support, following a significant increase in claims over the last two weeks.