If you owe money (for example court fines, rent, Council Tax or energy payments), money might be taken directly out of your benefits payments to pay the debt. This is sometimes called ‘third party deductions’ or, for gas and electricity payments, Fuel Direct.
The benefits that can be used are:
- Universal Credit
- income-based Jobseeker’s Allowance (JSA)
- income-related Employment and Support Allowance (ESA)
- Income Support
- Pension Credit
How deductions are made to pay your debts
Organisations you owe money to can ask for deductions to be made from your benefits to pay the debt. The office that pays your benefit will only agree to do this if the organisation has tried other ways of getting the money from you.
You’ll be told how much will be deducted by letter or in your Universal Credit journal.
How much is deducted
A fixed amount is deducted from your benefits until you’ve paid off the debt you owe. Money can be deducted to pay off up to 3 debts at once.
If you receive Universal Credit, 5% will be deducted from your benefit payment for each debt you owe. For rent, between 10 and 20% will be deducted.
If you receive other benefits, £4.55 a week will be deducted for each debt.
If you want to pay more than the fixed rate towards your debts, you must arrange this with the organisation you owe money to.
Paying your ongoing bills
While paying off debt to your gas, electricity or water supplier, you can have extra money deducted from your benefits to pay your ongoing bills.
Paying gas and electricity bills (Fuel Direct)
Contact your supplier to set up deductions for your ongoing bills. They’ll need your consent to request this for you. You can give consent on the phone. It does not need to be in writing.
Agree an amount with them that covers the cost of the energy you use.
You can stop deductions for ongoing bills at any time. Contact the office that pays your benefit to request this. If you choose to stop making gas and electricity payments, contact your energy supplier to arrange a different way to pay.
If you want to change the amount you pay, contact your supplier.
If you owe money but cannot afford more deductions to your benefits, your supplier can tell you what help is available for people on low incomes. They may be able to arrange a different way for you to pay.
Paying water bills
Your supplier can ask for money to be deducted from your benefits for ongoing water bills. If you get income-based JSA, income-related ESA, Income Support or Pension Credit, you can also ask for this.
The office that pays your benefit will tell you if your supplier asks for this. If the amount is over 25% of your benefits, they must ask you to approve it.
When you’ve repaid your debt
If you get Universal Credit, deductions for ongoing bills will stop once you’ve repaid your debt.
If you get other benefits, you can ask to continue paying your bills this way.
If you need to discuss your deductions
Contact the office that deals with your benefit.
If you disagree with a decision about your deductions, you can ask for mandatory reconsideration.
Universal credit
Contact Universal Credit through your online Universal Credit account or by calling the Universal Credit helpline.
Income-based JSA, income-related ESA or Income Support
Contact Jobcentre Plus.
Pension Credit
Contact the Pension Service Helpline.
