Good morning

You’ll find below, an exchange I’ve had with Neil Couling, DWP’s Director General, relating to the way DWP is currently mishandling the Third-Party Deductions (TPDs) scheme, especially as it relates to rent arrears recovery and levels of deductions being applied to some tenant awards.

I wrote to DWP about this in April 2019. In my email, I refer to various complaints made by my social and private landlord clients, including:

  1. Tenants having multiple deductions, leaving them sometimes with only a small amount each month to exist.
  2. DWP staff prioritising the recovery of their own and HMRC debts, at the expense of rent arrears, with the excuse, departmental debts were considered “higher priorities”.
  3. I maintained rent arrears & service charges are NO 1 in the pecking order of “priority debts”. Whereas, others like UC, TC & HB Overpayments are way down the list.
  4. In terms of rent arrears, TPD permits a maximum deduction of 20% where there are no other known debts. Or, 15 or 10% where others exist, like fuel, court fines etc. The minimum should be 10% and this sum can be paid even when the tenant has been sanctioned. In that case, any Managed Payments payments will be reduced by the amount of the 10% (prioritising the rent arrears) in an effort to avoid the landlord recovering the property.
  5. However, in practise, Housing Associations claim the rent arrears deductions oftentimes stop, without notice, and when they question why, are told, a UC or HMRC overpayment debt has been substituted.

As I hadn’t received a reply, despite reminders, I decided to write to amongst others, Mr Couling. He promptly responded stating:


I think your understanding is wrong.  Try appendix 4 of the guidance on the priority order I sent you in the debt guidance but I will check when I am back in the office tomorrow. From memory rent arrears is 22nd or 23rd on the list.  But as I said I will check tomorrow. “


By return, I responded:

“The hierarchy or pecking order, I referred to in my earlier email, is provided for in the Universal Credit (Claims & Payments) Regulations 2013. At schedule 6, paragraph 5 it explains:

Priority as between certain debts

5.—(1) This paragraph applies to a claimant (“C”) where, in relation to any assessment period—

(a) a deduction could otherwise be made from C’s award under more than one of the provisions mentioned in sub-paragraph (2); and

(2) The provisions are—

(b ) paragraph 7 (rent and service charges included in rent) of this Schedule [F22where the amount of the deduction equals 10% of the standard allowance];

The recovery of other Third Party debts like fuel & water charges, court fines, hardship payments, and, importantly, UC, HMRC overpayments are all further down the pecking order.

At paragraph 5 (4) it states – “The Secretary of State must give priority to any such deductions in the order in which they are listed in sub-paragraph (2), with housing costs having the priority.

So, as I explained in my earlier note, rent arrears, as far as tenants are concerned, is the number 1 priority debt, whereas, UC, HB & HMRC overpayments are way down the pecking order. Regulation 5 (3) makes clear – “(3) Where this paragraph applies to a claimant, the Secretary of State must make a deduction under any of the provisions mentioned sub-paragraph (2) in accordance with sub-paragraphs (4) and (5).

As explained, in your department’s ADM Guidance, Third Party Deductions are designed to protect the interests of the claimant, any partner, or children they may have. By not applying deductions in accordance with the legislation, especially in relation to “rent arrears”, you’re exposing claimants unnecessarily to the potential of eviction and homelessness. This needs to stop!

You and your colleagues also need to examine the rate of recoveries being imposed. At the moment, your staff are applying a far too punitive approach, concentrated on maximising the 40% threshold, and bolstering DWP’s coffers, through overly enthusiastic overpayment recoveries, completely overlooking the overall objectives of the scheme, plus the hardship and misery this is imposing on claimants and their families.

When I originally wrote to DWP in April, I was hoping your department would reconsider its flawed position and issue new instructions to staff that would ensure the rules and guidance are applied correctly. As things stand, you appear, yet again, to be pre-occupied with being defensive, than properly examining what’s been put to you in an objective manner

I look forward to a more considered and helpful reply.”

Mr Couling’s response:

“I have nothing further to add to my previous reply.  The deductions policy is being carried out in accordance with the law.  It seems to me what you are now doing is lobbying for a change in policy.  That’s perfectly legitimate thing to do.  But isn’t something we can comment on further here.

Our exchange ended:

“You’re clearly not applying the law correctly, as you’ve unwittingly demonstrated. You’re causing unnecessary rental loss to landlords (Social & Private) and exposing tenants to the vagaries of eviction and homelessness. You’re ignoring the plight of thousands of claimants, who are having punitive deductions made, leaving them with less than £20 per week, as the case study I supplied shows, yet you show no concern, nor empathy, or indeed, any intention of doing anything to address such anomalies.

Is it any wonder organisations, MPs, MSPs throughout the UK, despair at your department’s stewardship of Universal Credit – a great opportunity being missed!”


I’ve become accustomed to this type of response from DWP hierarchy. Even when it’s crystal clear, it’s operating at odds with the regulations and own internal guidance, its Directorate, either ignore or dismiss you, in a rather condescending manner, when you have the temerity to suggest, errors in the department’s administration.

The landlords and tenants’ position is made all the more difficult by their reliance on DWP’s  “Complaints Procedures”. As it currently operates, it simply impedes and frustrates you from securing a quick resolution. At stage 2, its Directorate is loathe to respond, knowing that delaying or refusing to do so, prevents a third stage referral to the Independent Case Examiner (ICE).

If you share my concerns, about the way in which some of your tenants are being affected, I would encourage you to raise these directly with Mr Couling’s office by emailing –  Mr Couling has invited evidence of cases that have been mishandled or where tenants have been left in financial hardship. The more we highlight, the quicker you and your tenants will benefit from a fairer and legally compliant regime.

If you require any further information on this or any other topic, please get in touch.

Bill Irvine

UC Advice & Advocacy Ltd