Low-income families in Scotland are having 10% of their monthly income deducted by the Department for Work and Pensions (DWP) to cover debts.
Children’s charity Aberlour found that more than half (55%) of Scottish families receiving Universal Credit (UC) were having their incomes reduced to pay off debts such as UC advances or school meals payments.
It said low-income families were having their monthly income reduced on average by £80 to cover spiralling debt, with 27% of families facing multiple deductions.
Aberlour said the debts also included “third-party deductions” on behalf of local authorities and other public bodies for rent arrears, service charges and council tax payments.
Professor Morag Treanor of Heriot-Watt University in Edinburgh carried out the research, which was based on freedom of information requests to the DWP.
She said: “This new report demonstrates that over half of families with children in Scotland are trapped in a damaging cycle of poverty because of Universal Credit deductions.
“With families seeing their monthly income reduced on average by £80 to cover those debts, while fuel and food prices rapidly increase is, in real times, significantly worsening their financial circumstances.
“These findings are a crucial reminder that the government needs to act now to support low-income families as we head into winter.”
Scotland has a higher proportion of families subject to multiple deductions from their monthly income by the DWP to cover debts to public bodies compared with England and Wales, according to the research.
Aberlour’s chief executive SallyAnn Kelly said: “Aberlour campaigned for the introduction and increase of the Scottish Child Payment as a vital boost to the incomes of families in Scotland who have the least.
“Our research shows that tens of thousands of families eligible for the payment are not feeling the full benefit of that financial help, as the majority of the increase in income it provides is being cancelled out by deductions to cover the costs of debt to public bodies.
“Quite simply, Scotland’s poorest families are receiving help with one hand that is being taken away by the other.”
Aberlour is calling for a moratorium on all public debt recovery for at least six months for those getting UC and legacy benefits to provide some relief to households during the worst of the cost-of-living crisis this winter.
It also wants school meal debt for low-income families to be written off.
A UK government spokesperson said: “We have reduced the amount that can be taken through deductions twice in recent years to no more than 25 per cent, doubled the time period over which they can be repaid and stopped utility companies from being able to increase payments automatically given the rise in energy bills.
“This balances people keeping the significant proportion of their payment with making sure priority debts are paid, such as child maintenance.
“We recognise people are struggling with rising prices and we are protecting millions of those most in need with at least £1,200 of direct payments this year including providing all households with £400 towards energy costs.
“Our extensive immediate support for families also includes our Energy Price Guarantee, saving around £900 for a typical household over the winter.”