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Thousands of Universal Credit claimants are having 40% of their benefits deducted to claw back outstanding cash owed.

Labour MP Ruth George said the move “will see more people with no option but to go into debt”.

The Department for Work and Pensions can directly collect debts from Universal Credit including for previous benefit and tax credits overpayments.

In January, 6% of claimiants – 40,521 – had 40% deductions on standard allowance, research found.

(Image: PA)

The DWP said it had “a duty” to recover overpayments, which totalled £1.1billion last year.

Meanwhile the major changes made to Universal Credit in April may have an effect on those who are actually earning, if they are self-employed, part-time workers and those on zero hour contracts.