The Department for Work and Pensions is warning over a mistake that’ll see benefits payments reduced by a staggering 50 per cent. A third-party deduction is an amount that is taken from your Universal Credit payments and paid direct to the person or organisation you owe money to, such as your landlord or your gas or electricity supplier.
Third party deductions can also be taken, without your permission, for things like housing costs (for example, rent arrears for your current address) or unpaid ratesor child maintenance. Some deductions can be made for ongoing costs, not just overdue amounts.
Third party deductions are fixed at five per cent of your Universal Credit Standard Allowance for each third party. If you’re receiving Universal Credit, 5% is deducted from your benefits payment for each debt owed, though for rent payments, it may be between 10 and 20%.
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Individuals receiving other benefits, such as income-based Jobseeker’s Allowance (JSA), income-related Employment and Support Allowance (ESA) and Income Support, may also see £4.55 a week cut for each debt owed.
DWP customers in receipt of certain benefits or credits may have deductions taken from their benefit and paid direct to a creditor/supplier under the Third Party Deduction Scheme. The government recognises the importance of safeguarding the welfare of claimants who have incurred debt.
Under Universal Credit there is a co-ordinated approach to deductions from benefit, which supports claimants to manage their financial obligations. The actual payment of monies owed to you, the creditor/supplier, and paid on behalf of the DWP customer is known as a third party payment.
Third party deductions are made according to a priority order. The amount you receive will depend on whether other deductions we take have a higher priority. A maximum of 3 third party deductions are taken from each payment of benefit.
The priority order differs between different benefits. If you require more specific information, please contact your customer’s benefit office.