Manage deductions from your benefits to pay debts and bills
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, £3.85 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.
Paying your ongoing bills
While paying off debt, you can have extra money deducted from your benefits to pay your ongoing gas, electricity and water bills.
Once your debt is repaid, deductions for ongoing bills will stop if you get Universal Credit. If you get other benefits you can ask to continue paying your bills this way.
Paying gas and electricity bills (Fuel Direct)
You can ask for gas and electricity payments to be deducted from your benefits. Only you can request or change these payments – your supplier cannot do this for you.
The cost of energy you use may be higher than the payments deducted from your benefits. Check with your energy supplier to see if you need to pay more.
If you owe money but cannot afford to increase your payments, contact your energy supplier. They’ll tell you what help is available for people on low incomes and may be able to arrange a different way to pay.
If you choose to stop making gas and electricity payments, you must contact your energy supplier to arrange a different way 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.
Request, discuss or change deductions
You can only choose to cancel deductions made to pay for ongoing gas and electricity bills.
If you think something is wrong with your deductions, you can ask for mandatory reconsideration.
To request, discuss or change deductions:
if you receive Universal Credit, contact Universal Credit through your online Universal Credit account or by calling the Universal Credit helpline
if you receive income-based JSA, income-related ESA or Income Support, contact Jobcentre Plus
if you receive Pension Credit, contact the Pension Service Helpline