Public debt such as Universal Credit advances "pull families deeper into debt and holds them there", experts have warned.
Research by Professor Morag Treanor of the University of Glasgow, a visiting professor at Heriott Watt University, looked at the issue of how public debt and arrears are experienced by low-income families.
Such families who receive social security payments are frequently forced to pay back significant proportions in the form of public debt, including for things like council tax, school meals, social rent and private rent top-ups and deductions from entitlements by energy companies.
Her work revealed how public sector debt recovery can inflict damage on families’ financial situation and highlighted parliamentary research suggesting government debt collection is “uncompromising” compared to the private sector.
Professor Treanor told The Herald: “The main problem with the proliferation of debt owed to government authorities is that their debt recovery practices are not governed in the same way as consumer debt and have been widely criticised for being harsh and punitive.
“Public debt pulls families deeper into poverty and holds them there.”
One of the leading causes of public debt is the mandatory five week wait for a Universal Credit claim to be processed.
More than half of single parents receive the benefit, whether they're out of work or low-income.
For those without savings, the main option to avoid going without essentials is to take the DWP Universal Credit advance, repayments for which are then deducted from future payments, or to take out another form of loan.
As of early 2020, two-thirds of those on Universal Credit were under one or more benefit deductions.
A 2020 survey by the TUC found 86% of those who had obtained an advance payment said doing so had put pressure on their household budget, with many relying on food banks or forced to go without food.
Research into food banks by Herriot-Watt University found 64% of people referred to a food bank were in contact with the Universal Credit system.
Many have called for the five week wait for a first payment to be abolished, or for the advance payment to be given as a grant and made non-repayable.
Citizens Advice Scotland policy officer Erica Young said: "We would like to see the complete abolition of the five-week wait.
"We don't think it reflects real life and it's a completely new feature of the benefit system.
"Not in the history of it has there ever been anything like this. All other benefits have been paid weekly or fortnightly.
"Given the level of universal credit, which is already not adequate to meet people's very basic needs, the situation can be quite dramatic for people trying to work their way around that budget.
"But most people don't have a choice but to take an advanced loan.
"The other alternative route that we could go down to resolve this problem would be to convert the five-week wait loan into a grant so that people don't have to pay that back."
Research by Professor Treanor revealed that around 80,000 families in Scotland receiving Universal Credit are having their incomes reduced by £80 a month on average by the DWP to repay debts to public bodies.
In addition, school meal debt totally more than £1m is owed by close to 25,000 low-income families who are not eligible for free school meals.
Aberlour CEO SallyAnn Kelly said: "We are calling on government at all levels to tackle the debt crisis that so many low-income families are facing and take action on public debt that prevents families getting into debt in the first place. This must include ending the 5 week wait for new Universal Credit claimants and increasing Universal Credit to a level that enables families to cover the costs of the essentials they need for themselves and their children.
"We also want to see action to make public debt recovery processes fairer and that don’t push families into deeper into poverty, recognition of the impact of domestic abuse and financial abuse that too often leaves women solely liable for a joint debt, and for local authorities and social landlords to stop preventing families moving to more suitable accommodation if they have outstanding rent arrears.”
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