PhD student hit with £17,000 bill by DWP after universal credit error | Consumer affairs

“The errors that have been made have been all on their facet,” she says. “We might be beneath the poverty line. I don’t assume I can justify the stress and emotional effort of doing the PhD if that’s the case.”

Common credit score was launched in 2013 and rolled out to switch a variety of different funds, together with earnings help and different in-work advantages. Presently funds embrace a £20 uplift that’s set to finish within the autumn.

The usual allowance for a single individual aged over 25 is at the moment £411 a month, and there are further funds of as much as £282 a month every out there for a household’s first two youngsters. On high of this, there’s a housing factor out there to cowl hire or mortgage curiosity prices. Different earnings and financial savings are taken into consideration when a declare is made, and month-to-month funds will be adjusted because of this.

Reid’s PhD engaged on renewable vitality on the College of Exeter brings with it a stipend to cowl bills from the Engineering and Bodily Sciences Analysis Council, which, primarily based on her hours, is value £11,500 a 12 months. When her utility for advantages was processed, the entire cost appears to have been disregarded.

Nobody observed till, final autumn, Reid notified the DWP that she was dropping her hours as a result of she couldn’t get sufficient childcare to work as regular. This prompted a evaluate of her declare and a letter saying that between January and December final 12 months she had been overpaid by just below £1,600.

At this level she was informed that 30% of her stipend ought to have been taken into consideration, and that she owed a number of months’ overpayments of £145 a time.

With the assistance of her dad, Reid appealed towards this. However there was worse to come back. The brand new assessor determined that the second evaluation was additionally incorrect. In a prolonged doc explaining their choice, the assessor stated “there seems to be a misunderstanding” and “your stipend is to be handled as a grant for UC functions”. Beneath the principles, which means that the entire cost needs to be counted, after tuition charges and a £110 a month allowance for books and journey.

The assessor wrote: “I acknowledge that you simply did provide proof with respect to your scholar earnings in an applicable time however as a result of an administrative error, your scholar earnings was not calculated and included in your UC award.”

Reid isn’t alone in going through a invoice for overpayments. Between July 2020 and the tip of June this 12 months, advisers on the charity Residents Recommendation heard from greater than 3,500 individuals who wanted assist with advantages overpayments. Throughout the identical interval, there have been greater than 50,000 views of its web site pages devoted to the topic.

In contrast to with earlier advantages, the DWP can recuperate overpaid common credit score even whether it is guilty for the error, though Treasury pointers do enable it to decide to not in distinctive circumstances. Restoration is completed by cuts to month-to-month advantages funds, taking cash instantly from an worker’s wages, or a court docket order.

Residents Recommendation says it has seen instances of common credit score overpayments the place notification got here utterly out of the blue. In a single occasion, a single guardian who was already in debt and utilizing meals vouchers was informed they owed £500 however not why, and so they struggled to contact the DWP.

Rachel Ingleby, a advantages professional at Residents Recommendation, says usually, the DWP will attempt to recoup cash for a common credit score overpayment by way of a deduction. “This implies they’ll cut back the quantity of advantages you’re paid every month till the debt is repaid,” she says.

“After all, when deductions come out of the blue, that may make it actually arduous for individuals to handle their cash.”

For Reid, who isn’t entitled to widowed dad and mom’ profit as a result of her husband had not constructed up sufficient nationwide insurance coverage contributions earlier than he died, the affect of the brand new choice is devastating.

She thinks her whole month-to-month earnings will fall by 35% however, regardless of being informed on 9 June that her entitlement can be reconsidered with a matter of urgency, she has not been informed what she’s going to get. “I’m nonetheless left in limbo, ready to seek out out what’s going to occur,” she says.

She is already struggling to seek out childcare, as Covid has restricted her choices, and has journey prices to face to finish her analysis. “I’d cycle [to university],” she says, “however that may take longer and imply extra childcare prices.

“I’ll undoubtedly have to go away my PhD if my earnings is decreased to the essential common credit score entitlement for somebody with one baby. I’m so devastated by this, I did completely nothing fallacious, however me and my baby must pay. We already pay the burden of being a widowed-parent household.”

After Guardian Cash acquired in contact, DWP stated it might look once more at Reid’s scenario.

A spokesperson stated: “We’ve got paused the reimbursement exercise and are finishing up an extra evaluate of this declare. We’re in touch with Ms Reid and can advise and help her by this course of.”

The DWP says the overwhelming majority of advantages are paid appropriately and on time, and that there are official errors in lower than 1% of instances.

It says seeks to recuperate any overpayments with out creating monetary hardship, and that those that are struggling can contact its debt administration unit. It says if the reimbursement charge it proposes is just too excessive, a decrease charge will be mentioned.

Reid says she’s going to proceed with tribunal motion to get the choice overturned, however she is relieved that her case is being checked out once more.

“I don’t assume anyone individual at common credit score or the DWP is out to trigger poverty and inflict distress, however the coverage doesn’t take into account people, or deal with us as individuals with lives,” she says. “The system is a poverty entice, and written into the legislation now’s the actual fact the people who find themselves poor sufficient to want advantages, must pay when the DWP makes a mistake, nevertheless huge or small.”

How does the DWP recoup cash from advantages overpayments?

Residents Recommendation will help when you have been hit with a invoice for overpayments. Right here is how the system works:

• The DWP has discretion over the way it recovers overpayments, and the way a lot.

• Overpayments of common credit score are sometimes recovered by way of deductions to future common credit score funds.

• The utmost quantity that may be deducted is 25% of the common credit score customary allowance, DWP says.

• Residents Recommendation says, in observe, deductions are typically taken at 30%, 25% or 15% of the usual allowance, with 30% usually the speed if an individual is discovered responsible of an offence or has accepted a penalty in reference to the overpayment.

• The DWP can cut back the quantity of the debt it recovers every month if somebody is experiencing monetary hardship because of this. Residents Recommendation says it will possibly help individuals with this course of.