Universal credit: third party deductions explained

Universal Credit claimants may have a certain amount of debt which may force the government to utilise the third party deduction scheme. A creditor can apply to have money taken from the

claimants Universal Credit payment to cover the debt. Under the current rules, a person can never get more than three third party deductions at a time. On top of this, the amount deducted

should be no more than 30 percent of the standard allowance. However, in a recent announcement the DWP confirmed that it will be “pausing” third party deductions until May 10. The DWP

confirmed this with the following comments: “We have received an unprecedented number of new benefit claims and have streamlined our operations to make sure people get the support they need

during this time. “As part of this, we have temporarily paused third-party deductions from UC – these will recommence on 10 May. “We are in the process of explaining the changes to claimants

via their online journal and to third parties, including housing providers who collect arrears via this method. “Third party payments that have been suspended include: Rent arrears, Service

Charge arrears and Council Tax arrears. “Direct payments for rent will continue and are not affected by this temporary pause.' If a claimant receives a deduction which they disagree

with, they can challenge the DWP on its decision. The DWP are obligated to review these challenges under “mandatory reconsideration” rules. These deduction pauses aren’t the only rules to be

changed in recent weeks due to coronavirus. Benefit overpayments used to have to be paid back as soon as possible but any repayments owed are now delayed until at least July 1. The

government has made many changes in recent weeks to provide reprieve for families who are struggling during this period.