Where a landlord has a current tenant claiming Job Seekers Allowance or Income Support and there are rent arrears, it is possible to claim a small amount to be paid from the JSA or IS direct to the landlord. This is called “third party deductions”.
What are ‘third party deductions?
Benefit customers should normally meet their household expenses from their income, like everyone else. But in some cases, the Department for Work and Pensions (DWP) can deduct money straight from a customer’s benefit to clear debts. These are called ‘third party deductions’.
The third party deduction scheme is for a vulnerable minority of benefit customers who have got arrears of essential household costs and haven’t budgeted for their debts. Third party deductions are only used if there’s no other way to clear the debts without putting the welfare of the customer or their family at risk.
Third party deductions can’t be made on request simply for the creditor or customer’s convenience. They must show that all other attempts to budget properly have failed (such as payment plans, and changing the frequency or amounts of payments).
Why are third party deductions used?
The main use of third party deductions is as a last-resort protection for vulnerable customers in debt. By helping people with debt management, it helps them become more responsible with their finances. Third party deductions are only made where it is in the interest of the individual or family – to avoid the severe hardship caused by eviction or disconnection of utilities, and preventing imprisonment for the non-payment of council tax or fines.