15th April, 2016
I recently responded to a question, posed by a website member on our “discussion forum”, which concerns the amount of “Third Party Deductions” (TPDs) that can be deducted in respect of rent arrears and whether, in cases of multiple deductions, where there exists related concerns over tenant hardship and sustainment, does DWP have any discretion to limit the amount of deduction to the 10% non-negotiable figure.
As the issue is of importance to all members, I’ve posted the question and my answer below for your information.
Discussion Forum Topic – Member – Jasmine
“Reducing deduction amount from 20%?”“We have a tenant who is having 20% (£63.56) deducted for rent arrears. In addition she is having a deduction of £49.70 for a short term payment advance and £10.78 for a hardship payment. After her rent is paid she is left with monthly payment of £193.78 to exist. We have had conflicting information from DWP’s Service Centre about who can ask for this reduction and seem to be going round in circles. What is the best way to request the rent arrears deduction be reduced from 20% to 10%? Thanks, Jasmine”.
Reply To: Reducing deduction amount from 20%
How much is deducted, above the non-negotiable 10% is entirely at the discretion of the DWP. Its staff have been provided with guidance on the topic:
“Amount to be deducted” – Paragraph D2121 – deductions for rent payments and service charge payments apply, subject to D2122 and D2124, the DM may deduct, in relation to that assessment period, an amount from the claimant’s award, which is no less than 10% and no more than 20% of the standard allowance and pay that amount to the person (organisation) to whom the debt is owed.
Legislation: UC, PIP, JSA & ESA (Claims &Payment ) Regs, 2013 – Sch 6, para 7(5)”
As you know, debts for “Housing Costs” are the highest priority debt in the “Third Party Deductions” hierarchy – this is explained in DWP’s guidance to staff. Where a tenant has other debts like council tax, poll tax, fines etc. the 10% is applied to the housing debt and 5% to each of two other debts, in accordance with the hierarchy (e.g. council tax, poll tax, fines, overpayments etc). Where there are NO other debts, the DWP can apply a further 5 or 10% to the standard rent arrears deduction (i.e. 15% or 20%) but that’s entirely at their discretion with no “rights of appeal” exisiting for either tenant or landlord.
I believe landlords, as applicants, or their tenant, should be able to influence how much, if any, above the 10% applies by pointing to any other deductions being applied and the concern this raises, in your mind, about tenant hardship and tenancy sustainment. This belief is reinforced by the fact DWP have already issued very detailed instructions to UC staff on this very topic and applied the desired approach when dealing with some of my other clients.
Try pointing this out to DWP to see if it changes the Service Centre staffs’ attitude to your plea for a reduction to the 10% level. If you don’t get anywhere, send the details of the case to me and I’ll ask for this to be reconsidered by DWP’s Policy Unit so all DWP staff apply the guidance fairly and consistently.
Phone me if you wish to discuss further. Bill
As the rollout gathers pace, we’ve noticed a significant increase, in both e-mails and discussion forum questions from both Private and Social Landlord Members http://universalcreditadvice.com/housing-associations/forums. If you’re encountering any such issues, please remember you can seek our advice, and, where appropriate, our assistance to help your staff resolve such issues. My e-mail is firstname.lastname@example.org and phone 07733 080 389.
UC Advice & Advocacy Ltd.