Anyone who receives Universal Credit, Pension Credit and several other benefits could see their payments cut in very rare situations
DWP benefits may face ‘third party deductions’ in very exceptional circumstances(Image: Getty Images/iStockphoto)
The Department for Work and Pensions (DWP) is warning that in rare cases, claimants may face reductions of up to 20% in their benefits. The UK Government provides financial assistance through various support systems, including Universal Credit and Pension Credit – but cuts can sometimes be applied.
These reductions, known as ‘third party deductions’, occur when a benefits recipient owes money for court fines, rent, Council Tax, or energy payments. Typically, a fixed amount is deducted from the benefit payment until the debt is settled, with a maximum of three debts being paid simultaneously through this method.
For Universal Credit recipients, a 5% deduction is made for each debt owed, while rent payments may incur a 10% to 20% deduction. Those receiving other benefits, such as income-based Jobseeker’s Allowance (JSA), income-related Employment and Support Allowance (ESA), and Income Support, may face a £4.55 weekly deduction for each debt.
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The DWP’s list of those affected is below:
- Universal Credit
- Income-based Jobseeker’s Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
- Income Support
- Pension Credit
Third party deductions are typically requested by an organisation that is owed money from an individual. These are then approved by the DWP in exceptional circumstances where an organisation has exhausted all other means to recover the owed funds, reports the Mirror.
“You’ll be told how much will be deducted by letter or in your Universal Credit journal,” the DWP’s advice clarifies. “…If you want to pay more than the fixed rate towards your debts, you must arrange this with the organisation you owe money to.”
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Third party cuts for ‘fuel debt’ – money owed for gas and electricity – is frequently referred to as Fuel Direct. Brits struggling with this can also opt for deductions, allowing benefits to cover ongoing energy bills.
The DWP continues: “Contact your supplier to set up deductions for your ongoing bills. They’ll need your consent to request this for you. You can give consent on the phone. It does not need to be in writing.
“Agree an amount with them that covers the cost of the energy you use. You can stop deductions for ongoing bills at any time. Contact the office that pays your benefit to request this.
“If you choose to stop making gas and electricity payments, contact your energy supplier to arrange a different way to pay. If you want to change the amount you pay, contact your supplier.
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“If you owe money but cannot afford more deductions to your benefits, your supplier can tell you what help is available for people on low incomes. They may be able to arrange a different way for you to pay.”
If you disagree with the cuts made to your benefits, you can request for a mandatory reconsideration. Individuals will need request this within one month of the monetary decision and must state a ‘good reason’ for it.
This may include the following instances:
- You disagree with the reasons for the decision
- You want to have the decision reviewed again
- You believe there is an error or missed evidence in the decision made
“Some decisions cannot be reconsidered. Others can go straight to an appeal,” the DWP adds. “Your original decision letter will say if this applies to you.”
For further information, head to the DWP’s website.