DWP Benefits Cuts up to 20% Per cent: Claimants may face Deductions from their Payments

DWP Benefits Cuts up to 20 per cent: Claimants may face Deductions from their Payments – For many people in the UK, benefits such as Universal Credit and Pension Credit provide essential financial support. However, the Department for Work and Pensions (DWP) warns that, under certain conditions, claimants may face deductions from their payments. These reductions, known as third party deductions, are applied to repay debts such as court fines, rent, Council Tax, or energy bills. Below, we break down what claimants need to know about these deductions, how they work, and what options are available to those affected.

What Are Third Party Deductions?

Third party deductions are cuts applied to a claimant’s benefit payments to settle outstanding debts owed to specific organisations, such as landlords, councils, or energy suppliers. These deductions are initiated only under exceptional circumstances when the organisation has exhausted other ways to recover the debt.

How Much Can Be Deducted?

The amount deducted depends on the type of debt and the benefit being received:

• Universal Credit: Each debt results in a 5% deduction from the claimant’s payment. For rent-related debts, the reduction can range from 10% to 20%.
• Other Benefits: For those receiving Income Support, income-based Jobseeker’s Allowance (JSA), income-related Employment and Support Allowance (ESA), or Pension Credit, £4.55 per week may be deducted for each debt.

Deductions are capped at three simultaneous debts to prevent excessive cuts.

Who Is Affected by These Deductions?

Claimants of the following benefits may be subject to third party deductions:

• Universal Credit
• Pension Credit
• Income Support
• Income-based Jobseeker’s Allowance (JSA)
• Income-related Employment and Support Allowance (ESA)

Claimants will receive a letter or notification via their Universal Credit journal detailing the amount to be deducted.

Fuel Direct: Deductions for Gas and Electricity Bills

A specific type of deduction, known as Fuel Direct, is used to repay gas and electricity debts. This system allows claimants to pay off their ongoing energy bills directly from their benefits.

How It Works:

• Claimants must contact their energy supplier to set up deductions, and their consent can be provided over the phone.
• An agreed amount will cover the cost of ongoing energy usage.
• Claimants can stop deductions at any time by contacting the office that pays their benefits or their energy supplier.

If someone cannot afford additional deductions, the energy supplier may offer alternative payment options or support for those with low incomes.

What If You Disagree with a Deduction?

Claimants who disagree with deductions made to their benefits can challenge the decision by requesting a mandatory reconsideration. This request must be made within one month of the decision.

Reasons to Challenge a Decision:

• You believe there was an error or missing evidence in the decision.
• You disagree with the reasons provided for the deduction.
• You want the decision to be reviewed again.

If your request is eligible, the DWP will reconsider the case. Some decisions, however, may not be reconsidered and may instead proceed directly to an appeal. The original decision letter will specify whether this applies.

While benefit deductions can help settle outstanding debts, they can also place additional financial strain on claimants. It’s essential for anyone facing such cuts to understand their rights, explore payment options, and seek assistance when needed. Whether it’s setting up Fuel Direct payments or requesting a mandatory reconsideration, claimants have tools at their disposal to manage these deductions more effectively. For further support, contacting the relevant benefit office or energy supplier can help address individual concerns and find a resolution.

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