Guidance

A guide for landlords – rent arrears and service charges

Updated 3 November 2023

© Crown copyright 2023

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This publication is available at https://www.gov.uk/government/publications/how-to-request-deductions-from-benefit-a-guide-for-creditors/third-party-deductions-from-benefits-a-guide-for-landlords-rent-arrears-and-service-charges

1. What is a third party deduction (Purpose)

The third party deduction scheme is designed to protect claimants in receipt of income-related benefits. It is used when a claimant has arrears of essential household outgoings and has failed to budget for these bills. Other methods to recover the debt must have been tried, for example negotiating different ways of paying and managing bills. There must be a real threat of enforcement action before consideration is given to applying for a deduction.

2. Why a third party deduction is taken (Value)

Third party deductions act as a safety-net to protect claimants when they have debts for essential household bills. They are only taken when it is in the interest of the individual or family, for example to prevent severe hardship caused by eviction and homelessness.

Landlords and tenants should take reasonable action to recover the arrears before applying for deductions.

The following benefits may have a third party deduction:

3. How the scheme works

We deduct a fixed amount to clear the arrears. The amount is deducted from the individual’s benefit at source and paid directly to the creditor until the debt is cleared.

Where there is an ongoing liability for service charges included with the rent, an additional amount is taken to cover these costs. This is to prevent further debt accruing and to help with budgeting in the future.

Where there is more than one debt, we can take a maximum of 3 deductions at any one time. DWP will apply the priority order when more than 3 applications are made.

Once a debt is paid off, a third party deduction will usually end. In some cases where the individual repeatedly mismanages their money, a deduction may continue to cover ongoing costs.

4. Debts covered by the scheme

The types of debt covered by the scheme are rated in a priority order. This reflects the degree of risk to the individual or their family by the enforcement action that may result from non-payment. The order is:

  1. Housing costs for specific mortgage arrears
  2. Miscellaneous accommodation costs, care homes and private hospitals
  3. Hostel charges
  4. Rent arrears including service charges
  5. Main fuel costs like gas and electricity
  6. Water charges (water then sewerage if 2 debts)
  7. Council Tax and community charge arrears
  8. Fines
  9. Refugee integration loans
  10. Eligible loans

5. What can be included in the debt

The total debt may include any legal or other costs incurred to recover the arrears.

6. Who can apply

You can apply for the scheme if you’re:

  • the claimant or their representatives
  • the landlord or their billing agent

7. How to apply

Use the application form for third party deductions for rent and service charges (the last document attached to the main ‘Deductions from benefit’ page) if you’re applying for a deduction from:

  • Jobseeker’s Allowance
  • Employment and Support Allowance
  • Income Support
  • Pension Credit

Send the completed form to the DWP benefit or pension centre that deals with the claimant’s benefit.

Read the Universal Credit third party deduction guidance if you’re applying for a third party deduction from a Universal Credit payment.

8. Personal data items

We must be able to identify the claimant from the details on the application for deductions. This should include the following where possible:

  • confirmation the claimant is in receipt of Housing Benefit
  • claimant’s name
  • address
  • date of birth
  • National Insurance number, if known, although applications will be accepted without this
  • name and address of the creditor making the application
  • the AP number of the creditor
  • the customer reference number
  • type of benefit being paid to the claimant, if known
  • other payment methods which have been tried
  • amount of the debt, including any costs
  • full weekly rent amount
  • proof of 8 weeks or more accrued debt
  • any figure to cover ongoing liabilities

We may need further information before making a decision, normally where the claimant has made the application, for example:

  • the amount of the debt
  • the weekly ongoing liability
  • any other information needed to process the application including details of:
    • any other methods of repayment already tried
    • any existing overpayment recovery from Housing Benefit
    • any disputes

You will receive either confirmation that the deductions have been put in place or rejected by the DWP. The customer will also be sent a notification informing them that deductions will be taken from their benefits.

9. Minimisation, accuracy, retention and reuse of data

9.1 Accuracy statement  

To comply with UKGDPR, you must ensure that data provided to DWP is accurate and up to date. Should you require to update any of the above information then contact DWP on:

Telephone: 0800 169 0310
Textphone: 0800 169 0314
Relay UK (if you cannot hear or speak on the phone): 18001 then 0800 169 0310
British Sign Language (BSL) video relay service. If you’re on a computer - find out how to use the service on mobile or tablet
Welsh language: 0800 169 0207

Monday to Friday, 8am to 5pm
Find out about call charges

9.2 Data retention

DWP will retain records of any applications for deductions for 14 months from start date. This is to keep a record of evidence to support the deduction from benefit. 

DWP Third Party Deductions Scheme does not reuse the data supplied for any other purposes.  

9.3 Purpose limitation  

The data shared is related to the processing of Third Party Deductions only. DWP will use this data to help customers clear debts accumulated for previous and/or ongoing rent and service charge. 

9.4 Data minimisation 

DWP does not require any further information than that listed in section 8 and no other detail should be presented. This is the minimum amount of personal data to achieve purposes for which it is being shared. 

9.5 Integrity and confidentiality of information 

DWP manages its information in line with the framework set out by the Personal Information Charter.  In accordance to agreed governance both parties will ensure all data is being shared in the most secure ways ensuring all security standards/measures are adhered to.

Further information around how DWP handles personal data can be found in the Personal Information Charter.  

9.6 Accountability and governance statement 

DWP confirm that they can demonstrate compliance with UKGDPR data protection principles this same legislation applies to landlords and billing agents and they should be able to demonstrate compliance with this law.  

The processing covered in this document is already mentioned in the organisations existing central record of processing activities.

Most third party deductions are imposed but there are some occasions where consent is needed from the individual. This only applies where the total amount of all deductions including any amounts to cover current costs, exceeds 25% of the main benefit, including any Child Tax Credit and Child Benefit in payment. We will identify these cases and seek the consent. Consent only applies for the following debt types:

11. How we decide if a third party deduction is appropriate

We’ll consider:

  • if the individual is receiving one of the specified benefits in section 2
  • if there is a threat of enforcement action for the individual and their family
  • if there are outstanding arrears of at least 4 full weeks’ rent accrued over a period of 8 weeks or more
  • if the individual or their partner is liable for the debt - an individual or their partner will normally be liable for the debt if named on the tenancy agreement; there may be occasions where we cannot make third party deductions, for instance deductions may not be made if the debt is the responsibility of a partner who has left the household
  • if a deduction is in the interests of the family
  • if the individual will be left with sufficient amount of benefit (10p benefit) to qualify for other linked benefits such as prescriptions, Housing Benefit and local Council Tax Reduction
  • if the debt takes priority over other debts - if there are already 3 other deductions for arrears in place, we’ll check the priority list in section 4; if the new request is for a higher priority debt, the lowest priority deduction will be stopped
  • if consent is needed - if so, we’ll take action to ask the claimant for their consent

12. Payments

Payment is made into a nominated bank account every 4 weeks in arrears. It may take up to 6 weeks before the first payment is received. We can take a maximum of 3 deductions at any one time.

Landlords and billing agents are to advise their customers that it can take up to 6 weeks before the first payment is received from DWP and will show on their payment records.

Information on payment queries

Third Party deductions is legislated for in Schedule 9 of the Social Security (Claims and Payment) Regulations 1987 and the Social Security (Council Tax) Deductions from Income Support 1993.

Under UKGDPR the lawful basis for this processing activity is Article 6(1) (e) - Public Task. It is not expected that special categories of personal data would be shared by landlords or billing agents, but if such data is processed by the DWP when making a decision on the landlords or billing agents request, DWP would rely on Art 9(2) (b) -  processing is necessary for exercising specific rights of the controller in the field of social security.

Landlords and billing agents must keep records of their own processing activities making note of the legal gateway and lawful basis used, as determined by them. The following chart summarises the rights of data subjects under the UKGDPR when public task is used as a legal basis: 

Right to: Applies? The Personal Information Charters/Privacy Notices apply
Right to be informed Yes The Personal Information Charters/Privacy Notices apply
Right of access Yes The Personal Information Charters/Privacy Notices apply
Right to rectification Yes The Personal Information Charters/Privacy Notices apply
Right to erasure No The Personal Information Charters/Privacy Notices apply
Right to restrict processing Yes The Personal Information Charters/Privacy Notices apply
Right to data portability No The Personal Information Charters/Privacy Notices apply
Right to object Yes The Personal Information Charters/Privacy Notices apply
Rights related to automated decision making including profiling Yes The Personal Information Charters/Privacy Notices apply

14. Data Controller Relationship 

The Data Controller Relationship for this initiative has been determined to be ‘Controller to Controller’.  

This has been applied as the landlord or billing agent and the DWP have different purposes to process customer data and make decisions independent of one another. The landlord or billing agent will be the Data Controller and be responsible for obligations under the data protection legislation until the customer’s data is received by DWP, at this point DWP will become the Data Controller of that personal information. 

15. Data protection notice

 The Department for Work and Pensions (DWP) information management policy is designed to ensure that DWP:

  • retains only those documents and data which support business objectives
  • saves money by reducing information storage costs
  • protects against allegations of selective document destruction
  • manages our information risks

DWP information management policy  

16. Further information 

Customers can request access to the personal information we hold about them through contacting the DWP directly. This is called the ‘Right of Access’. DWP will respond to freedom of information request obligations. 

Freedom of Information Requests can be made in writing or by e-mail.

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