Agenda item

            The Committee was reminded that the Standards and Business Committee, at its meeting on 23rd August, had agreed to adopt the following motion, which had been proposed by Councillor Matt Collins and seconded by Councillor Ferguson:

"This Council notes new research carried out by the Joseph Rowntree Foundation documenting the alarming cost of living impact due to benefit deductions and debt recovery.

Many in receipt of means tested benefits and on Universal Credit, including many in work, are in bill payment arrears; taking on unaffordable debt; are going without household essentials; and are unable to properly heat their homes or feed their families. With inflation continuing to rise and the hardship emergency predicted to become more extreme as we face into the winter months the situation for many is set to worsen in the absence of immediate intervention.

Benefit reductions to repay government and utility providers at unaffordable rates are compounding the hardship crisis faced by many of those struggling the most. Government departments are in some cases claiming back debts at higher rates than private creditors. Many people are unaware that they can receive debt reduction help.

The Council will write to the Department of Communities’ Minister requesting the immediate suspension of government debt recovery for those in receipt of benefits and universal credit.

The Council also requests that the Department of Communities provide information on how many benefit and universal credit claims were subject to deductions in the most recent month for which data is available, broken down by Council area; how much on average was deducted in each Council area; what the total sum was of deductions in each Council area; and what proportion of each of those sums was deducted to repay advance payments."

            The Interim City Solicitor and Director of Legal and Civic Services informed the Committee that a response had been received from Ms. L. McLaughlin, Director of Pensions, Disability, Benefit Security and Debt, on behalf of the Minister for Communities. 

            Ms. McLaughlin had begun by assuring the Council that the Department for Communities understood the financial hardship which many people were experiencing as a result of the current cost of living crisis. The Department was continuing to consider options to provide both immediate and medium to longer term interventions to help alleviate financial pressures, including supporting individuals who were struggling financially. 

            She had then addressed the reference within the motion to deductions which were made to repay utility providers by confirming that customers in receipt of certain benefits may have deductions taken from their benefit and paid to a creditor, under what was known as the Third-Party Deductions Scheme.  There were, however, limits to the level of deductions from benefit which could be made under this Scheme and she provided an assurance that third party deductions would only be made when it was considered to be in the best interest of the individual or their family.  These were last resort deductions and were taken when an individual was in rent or utility arrears and where there was a risk of eviction, or their energy or utility supply being disconnected if payment was not made. It was, therefore, a safeguarding measure for many vulnerable individuals and their families.

            Ms. McLaughlin had then referred to the request within the motion for the Minister to consider an immediate suspension of government debt from benefit and Universal Credit claimants, to help ease the financial burdens. She had pointed out that the temporary suspension of debt recovery, which had, in 2020, been implemented as part of the Department’s Covid pandemic response, was in line with and supported by the Department for Work and Pensions.  The Department for Work and Pensions was not considering a further pause in recovery activity at this time.

            She had gone on to stress that to implement a unilateral suspension of recovery in Northern Ireland would be a complex process, relying on manual action in respect of over 200,000 cases. More significantly, it would constitute a break in parity with the Department for Work and Pensions’ approach and would, therefore, require Treasury approval.  Pursuing a temporary suspension in Northern Ireland would also result in financial penalties to the Northern Ireland Executive’s Block Grant at a time of significant existing funding pressures.  The financial cost of any divergence from parity, of this nature, would require Executive agreement.

However, the Department for Communities had a level of existing discretion to reduce, defer and, in exceptional circumstances, to waive social security debt. As an alternative to suspending all debt recovery, the Department encouraged those people who were experiencing difficulty with their repayments to contact the Debt Management Service.  Staff there were trained to support and work with individuals to help put in place a more affordable and sustainable repayment plan and could signpost individuals to organisations delivering independent debt advice and other support services.  The Department was currently finalising a programme of communications aimed at raising public awareness of the support available in respect of debt recovery and officials were working closely with the independent advice sector to ensure that information and support reached those who needed it. 

Ms. McLaughlin had concluded by pointing out that the Department for Communities had been unable to provide the information requested within the motion on the number of benefit claims which were subject to deductions, how much on average was deducted, the total sum of deductions and the proportion of deductions made to repay a Universal Credit advance, as it was not collated on a council-by-council basis. Annex 1 of the response did, however, provide the data requested on all benefit claimants in Northern Ireland who had been subject to benefit deductions during August 2022, although this data had not been quality assured to Office of National Statistics standards.   

The Committee noted the response.