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Universal Credit drives family to payday loans to cover bills and Christmas presents

A FAMILY on Universal Credit has been forced to resort to payday loans to pay for Christmas presents.

Ethan Johnston, 20, says he needed to take out hundreds of pounds just to pay the bills - and so he and his girlfriend can get her kids something for the holidays.

 Ethan Johnston has been forced to rely on payday loans after going onto Universal Credit with his girlfriend Ashleigh

Ethan Johnston

Ethan Johnston has been forced to rely on payday loans after going onto Universal Credit with his girlfriend Ashleigh

After moving in with his girlfriend Ashleigh Hart, 24, in Dumfries, Scotland, a few months ago, the couple have had serious problems with the new benefit system, which rolls six payments into one.

He’s just had to take out a £500 loan with Pounds to Pocket to pay off his Wonga loan, and start planning for the holiday period for his "little monsters" - step-kids Mason, 3 and Demi, 5.

“We had no problems before going onto Universal Credit, we were living comfortably,” he told The Sun Online.

“It’s completely wrong the money they are trying to give a family of four - I’m just working to pay the bills and that’s it.”

 He says he's had to take out a £500 high interest loan just to be able to buy Demi and Mason some Christmas presents

Ethan Johnston

He says he's had to take out a £500 high interest loan just to be able to buy Demi and Mason some Christmas presents
Ethan says all their spare cash is eaten up by bills, car insurance and food - leaving the couple constantly rowing over money

“We are having to live off loans and handouts from family and friends,” he added.

“We’re lucky Ashleigh has a big family so the kids will still be able to get some presents this year.”

Since going onto Universal Credit every month the couple have received different amounts, so they find it impossible to properly budget.

Ethan, who works full-time as a labourer for the council, said last month the family were left with just £150 a week to live on and pay all their bills, because of the £1300 a month he gets paid.

They were hit with a huge hit to their finances when he got paid some extra money for overtime, which had been backdated.

Because he was paid more for one month, their benefits were immediately slashed.

He reckons they are in debt around £2000 to family, friends and debt firms since going onto Universal Credit, despite working full time.

And it’ll take him at least a year to pay them all off, he said.

“We’re arguing a lot over money, it’s the stress really. And we can’t afford to do anything at the weekends.

“Coming into winter, that’ll be the real struggle. She will get barely get anything as I’ll be doing more overtime.”

 Universal Credit is being rolled out and replace benefits like job seekers allowance and child tax credits with one single payment

Alamy

Universal Credit is being rolled out and replace benefits like job seekers allowance and child tax credits with one single payment

And he had to ask his mum to help out to buy school uniforms which they couldn’t afford to get when the eldest began primary school too.

Ethan claims their family would be better off if they lived apart, as her benefits were affected so much by his income - and has even thought about moving back out again.

Before he moved in with her, she was getting £1400 a month, but now has been told she is unlikely to ever get more than £400 - due to money taken off for debt and advance repayments, and due to his income.

UC has taken up to £1000 off what they are entitled to because of his work allowance.

For every pound above the work allowance threshold, the DWP takes back 63p of it.

The new system has been beset with problems - with Brits claiming they are worse off, are being forced into prostitution, and even that its fuelling domestic violence.

Ministers have said that no one will be worse off when they are transferred onto the new system, but those who have a change in circumstances like Ethan and Ashleigh aren't covered by this rule.

Tory MPs have been battling the Chancellor, urging him to put more money into the scheme in the upcoming Budget.

What to do if you have problems claiming Universal Credit

IF you're experiencing trouble applying for your Universal Credit, or the payments just don't cover costs, here are your options:

Apply for an advance - Claimants are able to get some cash within five days rather than waiting weeks for their first payment. But it's a loan which means the repayments will be automatically deducted from your future Universal Credit pay out.

Alternative Payment Arrangements- If you're falling behind on rent, you or your landlord may be able to apply for an APA which will get your payment sent directly to your landlord. You might also be able to change your payments to get them more frequently, or you can split the payments if you're part of a couple.

Budgeting Advance - You may be able to get help from the government to help with emergency household costs of up to £348 if you're single, £464 if you're part of a couple or £812 if you have children. These are only in cases like your cooker breaking down or for help getting a job. You'll have to repay the advance through your regular Universal Credit payments. You'll still have to repay the loan, even if you stop claiming for Universal Credit.

Cut your Council Tax - You might be able to get a discount on your Council Tax or be entitled to Discretionary Housing Payments if your payments aren't enough to cover your rent.

Foodbanks - If you're really hard up and struggling to buy food and toiletries, you can find your local foodbank who will provide you with help for free. You can find your nearest one on the Trussel Trust website.

 He says the couple were forced to ask friends and family to help pay for the kids' school uniforms too

Ethan Johnston

He says the couple were forced to ask friends and family to help pay for the kids' school uniforms too

Ashleigh wants to go back to work but due to the sky-high cost of childcare, she wouldn’t be earning anything extra if she were employed, Ethan says.

“Now we’re living together, it's put a lot of strain on our relationship," Ethan added.

“I wish the Government could see how hard it is just for a young family to live together.

“I’ve only just turned 20 and already feel as though they don’t care.”

A DWP spokesperson told The Sun Online: “Universal Credit is a flexible benefit that gives people more control over their working lives and, as a result, is helping people get into work faster and staying in work longer.

“Earnings from work will affect the amount of support people receive and, in the case of a joint claim, the earnings of both parties are taken into account. The amount paid to a couple living together reflects that there will be shared costs.

“The monthly standard allowance for a couple is higher than for a single person. If a person’s wage goes up, their benefits payment will decrease.”

DWP boss Esther McVey admits some Brits will be worse off on Universal Credit

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