Why are we talking about student debt but not benefit debt?

The state and its ‘providers’ are crushing people with debt. Rather than helping people, they own them. The problem is as urgent as student debt – and an amnesty is long overdue.

Kate Belgrave
18 September 2017

Image: JobCentrePlus office. Wikimedia/Creative Commons

This is a story about the preposterous demands for money made on people who rely on what we used to call the ‘welfare state’ – on councils, housing providers, and the Department for Work and Pensions. Organisations which are supposed to support, not fleece, people in the greatest need.

Let’s start with Sam’s story. A 22-year-old Newham woman and mother to a young child, when I spent several days interviewing here she was in debt to every single one of the organisations that she relied on for housing, income and support.

Sam owed money for unpaid council tax and court fines. She had serious rent arrears - more than £1600 and rising. Sam’s flat was managed by the Notting Hill Housing Trust. Her rent had increased, but her housing benefit was capped and she had a shortfall of about £46 each week. She was dealing with a difficult domestic problem which took up a lot of time and energy and which affected her benefit entitlements. Sorting this out took months. Finding a cheaper flat in the area was extremely challenging (we tried). 

Sam struggled to fill in complex forms for council tax and housing help with Discretionary Housing Payments (DHPs), payments that are to help with short term rent shortfalls. We ended up filling in the form together. The Notting Hill Housing Trust wanted £66 a week in shortfall and rent arrears repayments. Sam received only about £73 a week in jobseekers’ allowance.

Smaller weekly arrears repayment plans were proposed, but even a fiver a week was a problem by this point. Sam was also repaying a loan from the DWP, who were deducting as much as £15-£18 a week. At times, Sam had as little as £50 a week to live on. There wasn’t spare for paying arrears. There didn’t seem much point in trying to find spare, either. A fiver a week would have barely made a dent in these debts. Small weekly or monthly repayment plans in these situations are a farce.

One thing was certain. In work or not (Sam was applying for minimum wage jobs), Sam would never clear these debts on her own. Her income was too small and her debts were too big and escalating too fast.

Sam’s situation was so out of control that she just couldn’t address it. Demands for money, the torrent of papers and threats from creditors, and bailiffs’ visits became part of daily life. So did hostility. I attended several meetings with officers about these debts which were extremely unpleasant.

A discretionary housing payment from the council covered Sam’s rent shortfall problem for a few months, but the debts went beyond such short-term fixes.

Such debts often do. People’s benefits and low incomes just do not cover the extra costs that welfare reform and dysfunctional state bureaucracies land on them. They never will. People are hit by punitive social security ‘reforms’ from all angles. The cuts to council tax benefit. The capped local housing allowance (housing benefit). The benefit cap. The bedroom tax. Benefit sanctions as punishment for not meeting poorly-defined or impossible conditions. The sudden loss of Employment and Support Allowance for people who’ve been found fit for work. The delays to benefit payments, particularly Universal Credit (now paid direct to tenants, not to landlords).

And then… The deductions for DWP loans which were taken out to cover costs that people couldn’t meet in the first place. The exorbitant court costs for the council tax debts and other arrears.

The state loads costs and charges onto people who never had the money to pay. That means debt is inevitable. Once in debt, escape is impossible.

It’s time that mainstream politics acknowledged this.

An amnesty is needed. It is need as badly as any amnesty on student debt.

These debts keep people in their place. People know this. They look at their council tax, court and DWP payment demands, and then at their bank balances, and they know they’ll never win. I have only really seen big debts cleared when campaign groups have organised help, or alerted a philanthropic someone, or when welfare advisers have arranged DHPs, or back payments for stopped or suspended benefits. The rest of the time, things hang. That’s why people think “the hell with it,” and buy a few treats, ignore impossible money demands and scream at council and jobcentre officers. People in traps do scream.


I hear variations on Sam’s scenario regularly. I talk with people at foodbanks, jobcentres and lunch kitchens - people in debt for costs they must shoulder because of social security ‘reforms’. They often have complex problems which require time, money and support to address (mostly, they require money). When they get work, it is low-paid and irregular.

The council and DWP systems that people must use to sort out payments are incredibly hard to navigate – and often downright unusable. Far from helping people avoid debt, these unreliable systems often land them in more.

At times, it seems that everyone I talk with is having money deducted from benefits to repay a DWP loan. Amounts deducted vary inexplicably. People often say they think their loan should have been paid off long ago.

Grossly under-resourced and semi-privatised state bureaucracies obstruct, rather than help, people who want to question debt totals, or understand how much they owe and why, or if they can reduce debt repayment rates, or when a benefit payment will start, or even if there’s any other money help available.

I’ve waited 40 minutes and more on hold to charged-for DWP phone numbers. Medical documents sent to the DWP to help people avoid sanctions can go missing, or take days to process.  Vital benefit and rent payments can be delayed by a hopelessly inflexible bureaucracy. Late last year, I attended a Croydon jobcentre meeting where an adviser refused to make a simple confirmation phone call to a lettings agent to start a young claimant’s rent money so that she could avoid getting into rent arrears.

Council claim forms for basic support money such as DHPs can be ridiculously lengthy and invasive. Some come with strict Towards Work conditions. You need a good internet connection to complete the forms online.

People with learning and literacy difficulties, or mental health conditions, or who’ve lived at different addresses and have problems sourcing bank statements and paperwork to support claims, struggle to navigate these complex systems. They fall into debt - and stay in debt.

A Kilburn jobcentre adviser admitted to me that people with support needs were falling through the net because they couldn’t manage the DWP’s complex bureaucracy. She was telling me what I already knew. I visited her with a claimant with learning difficulties who had fallen into serious rent arrears, because her housing benefit claim had been stopped when the jobcentre cancelled her JobSeekers Allowance claim unfairly. Nobody at the jobcentre meetings we attended about the problem would help her restart her claims. She was told to restart her JSA claim online herself. She couldn’t, so went weeks without money. The thing was a maze. Claimant-bashers really ought to try it.

In June this year, I spoke with Emma, 31, at the South Chadderton foodbank in Oldham.

Emma had three children, the youngest a baby of six months. Emma estimated that she was losing about £50 from her Income Support payments each fortnight in sanctions and deductions. Her benefit had been cut, because she’d missed two jobcentre interviews that she didn’t know she had to attend (it turned out these interviews probably weren’t even compulsory).

The DWP was also deducting loan repayments from Emma’s benefits. The amount taken varied. Emma said she never knew how much money she’d receive from one benefit payment to the next. She’d rung the DWP to ask the department to reduce the repayment amounts. The DWP said that Emma must put her request for a repayment reduction in writing. She’d stopped trying at that point. A man who arrived at the foodbank at the same time said he had the same problem and had been told the same thing.

Emma said she’d found a cleaning job, but that her benefit payments had been reduced when she started the work. “...My money went down… I thought it was because of the job… I were doing two hours a day – eight to nine hours a week.” It wasn’t 16 hours [the limit Emma thought she could work without her benefits being affected].” Her problems trying to work out what had changed rolled on and on.

I spoke with Neil (name changed) at the same foodbank in February. Neil had served a short jail term for theft by finding:

“[It was] a load of slates in the alley. They’d been there for two year.”

While in prison, Neil lost his housing benefit for several weeks. He’d been in rent arrears ever since. His debt was £1000 and climbing.

Oldham’s First Choice Homes was demanding fortnightly repayments. First Choice rang Neil so often about this debt that he no longer answered his phone. He didn’t see the point.

Neil hadn’t made rent arrears repayments over Christmas and New Year. He’d kept his benefit money in his account, because he wasn’t confident that the DWP’s benefit payment systems would work over Christmas, or that there’d be anyone around to help if they didn’t. Like so many people who must use social security systems, Neil thought in terms of worst-case scenarios. He reasoned that it was better to keep the money that he had over the break. Needless to say, his unpaid rent arrears grew.

“They [First Choice Homes] said, “can you make a payment now?” I said, “I’ve got nothing to give you… they’re saying, “can you pay this? Can you give us that?” They’re going on and on and on.

I said, “the way that you’re going on, you’re making me feel like going back to the flat and committing suicide, because of the pressure that you’re putting me under...”

Neil said he had a court summons for council tax non-payment. He also said that the DWP was deducting loan repayments from his benefits. Neil said he was confused about these loan repayments. He thought any loan he’d taken out would have been paid long ago:

“I’ve not had loans, crisis loans, nothing from the social for like ten year and they’re still sending me letters saying that I owe them so much – “we’re taking this out of your money.” I don’t know where it is coming from…Whatever I owed, it would have had to been paid by now.”

In July, South Chadderton foodbank volunteer Jean Jones told me that the foodbank sometimes increased food parcel eligibility due to extensive delays in fixing benefit problems. People were once restricted to three foodbank visits in a set period. Now, people were often permitted four visits, because benefit problems and delays meant they had to go without money for so long.

Pat McCullough, a 67-year-old Oldham man I often talk to at a Tuesday Ark lunch and support group had (and still had, at my last visit) that problem. He’d had four foodbank vouchers in 2017, because his pension credit had suddenly stopped. His case worker was still trying to find out why.

The state and its providers do not help these people. The state and its providers own these people. It will own these people for life. People inevitably fall foul of costs incurred by one or more welfare ‘reforms’ and ‘austerity’ cuts. Once in debt, they’re in debt for the long term, to the very organisations that are meant to provide housing, income and support. That’s sinister.

It doesn’t matter how loudly anyone insists that people take responsibility for their financial problems. The truth is that a lot of these financial demands and problems can’t be avoided. There are too many to duck them all.

People who are perceived to be responsible (and punishable, more to the point) for their financial troubles – single mothers, people with addiction problems, people who are in and out of work, or prison, or who happen to get sick – all are hit hard by a ‘reforming’ elite. But insisting that people pull themselves up by their bootstraps does not magically improve real-life financial options.

Labelling people as “scroungers” does not mean that people suddenly find thousands of pounds to avoid or pay debt. Mainstream politics needs to stop pretending that it does. So-called ‘austerity’ has left us with bare-bones, semi-privatised bureaucracies which are too understaffed and dysfunctional to keep people afloat. Little wonder everyone stops trying.

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