The Department for Work and Pensions (DWP) has confirmed a significant change to Universal Credit rules for anyone who rents their home. The updated guidance, announced on Wednesday, June 10, introduces greater protections for tenants.
New Rules for Third-Party Deductions
The DWP has added new information to the 'Other debts you owe – third party deductions' section. Under the revised policy, thousands of renters on Universal Credit can now object to landlords' requests to recover rent and service charge arrears from their benefit payments. Third-party deductions occur when money is taken directly from a claimant's Universal Credit to pay debts such as utilities (electricity, gas, water), Council Tax, child maintenance, rent, service charges, and court fines.
However, the DWP stipulates that only three third-party deductions can be taken at any one time. Claimants will receive a message in their online journal when a deduction begins.
How the Process Works
According to the DWP, landlords can request a deduction from a tenant's Universal Credit if rent or service charge debts are owed. These debts become arrears the day after they are due under the tenancy agreement. Universal Credit will notify the tenant if a landlord makes such a request.
Tenants have seven days to log into their Universal Credit account and indicate whether they object to the deduction. If no response is given, the deduction may proceed automatically. Claimants can object if they are in a dispute with their landlord about repairs, if they owe less than a certain amount, or if they do not owe any arrears.
Key Protections
The DWP clarified that deductions are only made for arrears on the claimant's current home. Tenants who have moved or plan to move should inform the department promptly. After lodging an objection, claimants have an additional seven days to provide supporting evidence. The DWP will then review the evidence to decide whether to proceed with the deduction.
This change aims to safeguard renters from unfair debt recovery practices while ensuring that landlords can still recover legitimate debts through a fair process.
