How DWP powers mean your landlord can take money from benefits payments
Work and pensions secretary Liz Kendall said she would "right the wrongs" of the system after a legal challenge saw a judge rule that the system processing tens of thousands of deduction requests each year was unlawful.
The case was brought by tenant Nathan Roberts, who was shocked to discover that the DWP did not ask him before docking £500 from his benefits at the request of his landlord, Guinness Partnership, whom he was in a dispute with over repairs.
Up to 10.3 million deductions from claimants' payments for rent and service charge arrears, worth £479m, have been made via the DWP's process since 2017, a freedom of information request made by i news has shown.
When it was introduced under the roll out of universal credit in 2013, the then-Conservative government said it would prevent claimants being evicted from their homes because of overdue arrears.
Here's what we know about the system, its current powers, and what to do if a deduction has been made.
The DWP has the power to automatically deduct up to 20% of someone's monthly universal credit payments for outstanding rent repayments using the controversial program.
While the concept of benefit deductions for the likes of rent arrears has been a part of the UK benefits system since the 1970s, it was automated under the Conservative government when universal credit was introduced.
The deductions can be made without the person being consulted by either their landlord or the DWP.
This affects people in both social housing and private tenants.
In the case of the private tenant, since 2017 they have been able to challenge the application for the direct payment within seven days if they do not have rent arrears or are engaged in a formal disrepair dispute with their landlord and are withholding rent.
This is not the first time automated payments like this have been ruled unlawful.
In 2022, a similar program that allowed utility companies to automatically deduct hundreds of pounds a year from individuals' benefits without their consent was also declared unlawful by the High Court.
Helen Timson, a disabled former police officer, brought a case against the government after her utility company repeatedly deducted payments from her universal credit — including £81 a month for a year-and-a-half for a non-existent debt, the Guardian reported.
While the DWP was required to make deductions only if they were in the "interests of the claimant", the court heard workers green-lit the deductions without consulting or informing the claimant – meaning they could not be in a position to decide whether the deduction was in the claimants' interests.
However, the right for the DWP to make deductions on behalf of a utility provider are still in place today. As of April 2025, deductions for utility bills fall under the category of third-party deductions, which will be set at 5% of the standard allowance from April 2025.
The DWP can take more than the general limit if it would prevent a claimant's fuel supply from being cut off.
The general limit for all debt deductions is currently 25% of your universal credit standard allowance. This will go down to 15% from April 2025.
It's important to note that while the system is being reviewed, it has not yet been scrapped or halted.
If you notice a deduction from your universal credit payment that you don't recognise or suspect to be rental related, you can take the following steps:
Check your universal credit online account for any messages or notifications about the deduction.
Contact the universal credit helpline immediately at 0800 328 5644 to inquire about the deduction and its reason.
If you disagree with the deduction, you can challenge the decision by asking for a 'mandatory reconsideration' within one month of the decision date. You can do this by writing a message in your universal credit online account, filling out a CRMR1 mandatory reconsideration request form on gov.uk, writing a letter to the DWP at the address on your decision letter, or calling the number on the decision letter (if near the deadline).
When requesting a mandatory reconsideration, include the date of the decision, specific reasons why you disagree, and your name, address, and national insurance number.
The DWP has said it will now look at this process and consider better ways of ensuring landlords get the rent they are owed in a fair and proportionate way while benefit claimants are protected from falling into debt.
The work and pensions secretary also confirmed the DWP will not appeal this decision. In response to the ruling, Kendall said she was "determined to right the wrongs that have persisted in the benefits system for too long", adding that the rental payment deductions "is one of these".
"As well as urgently reviewing this system, I am bringing forward major changes to the health and disability benefits system so that it works for everyone, underpinned by the biggest employment reforms in a generation.
"We will continue to listen to people's concerns, and transform our benefits system to one of fairness, not punishment," she added.
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