Pension Credit and Universal Credit are among several financial aids for people in the UK. However, the Department for Work and Pensions (DWP) cautions that claimants may face cuts ranging from 5% to 20% in rare but urgent situations.
These reductions, known as ‘third party deductions’, occur when a benefits claimant owes money for court fines, rent, Council Tax or energy payments. Normally, this deduction will be at a fixed value until the bills are paid off, with a maximum of three debts payable at once through this approach.
If you’re on Universal Credit, 5% is deducted from your benefits payment for each debt owed, but for rent payments it could be between 10 and 20%. Anyone receiving other benefits, such as income-based Jobseeker’s Allowance (JSA), income-related Employment and Support Allowance (ESA) and Income Support, may also see a weekly cut of £4.55 for each debt owed.
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 usually requested by an organisation to which an individual owes money. The DWP approves these in extraordinary cases where the organisation has exhausted all other means to recoup 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 explains. “…If you want to pay more than the fixed rate towards your debts, you must arrange this with the organisation you owe money to.”
Deductions for ‘fuel debt’ – owing money for gas and electricity – are more commonly referred to as Fuel Direct. People in the UK who want to manage their bills can approach suppliers to arrange deductions directly from their ongoing energy usage.
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.
“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.”
In situations where you disagree with the deductions made to your benefits, the option to request a mandatory reconsideration is available. This must be requested within one month of the monetary decision, citing a ‘good reason’.
This might apply in specific circumstances:
- 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.”