A disabled woman is to challenge the Department for Work and Pensions in court over what she calls its “immoral” policy of allowing landlords and utilities companies to automatically make deductions from monthly benefits payments without the claimant’s consent.
Helen Timson, 50, of Leicester said the third party deductions scheme, which allows up to 25% of people’s monthly means-tested benefits to be diverted at source to pay off arrears, was unlawful and could leave many people without enough money to buy food and pay rent.
At least 200,000 UK households face deductions from their benefits as a result of water, gas and electricity firms arranging with the DWP to have customers’ arrears paid automatically – and there are fears that rising energy prices will lead to more families becoming subjected to the scheme.
Under current practice, the DWP does not seek consent from the claimant for these deductions if they amount to less than a minimum threshold of 25%. Nor does it conduct means tests, or attempt to agree realistic payment plans with creditors.
Timson said she had twice had deductions made without her agreement. These happened once when her water supplier had tried to charge her £2,200 because of a faulty meter; and again when an energy firm deducted £80 a month, even though she was not a customer and had no arrears.
As a result of the deductions she was pushed into near destitition and unable to pay her rent. On one occasion she had to cancel an appointment for an NHS cancer scan because she did not have enough money to pay for a taxi.
“Paying arrears should not leave benefits claimants destitute and unable to pay for basic necessities,” said Timson, who is currently in receipt of disability unemployment benefits. “There must be a viable way for third parties to arrange a realistic repayment schedule with the debtor’s consent, rather than allowing utilities firms and landlords to help themselves to a quarter of people’s benefits – including for errors where no money is owed.
She said: “It is immoral and indefensible that utilities firms plunge people even further into poverty, leaving them without enough money for rent or food, while earning interest on money paid to them in error.”
The case is expected to be heard in the next few months.
A DWP spokesperson said: “Safeguards are in place to ensure deductions are manageable for customers and they are encouraged to contact DWP if they believe a deduction from their benefit should not be made.”