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Chapter D2: Third Party Deductions UC, JSA & ESA

Contents
D2001:Introduction
Definitions
D2009:Assessment period
D2011:Child element
D2012:Standard allowances
D2013:Percentage of the standard allowance
D2014:Water charges
D2015:Work Allowance
D2019:General
D2021:In the interest of the claimant
D2024:Limitations applicable to deductions
D2026:Liability for debt
D2031:Consent required
D2032:Consent not required
Maximum amount
D2038:Insufficient UC
D2042:Priority between debts
D2049:Exceptions to standard rate deduction
D2050:Superseding a third party deduction decision

Third party deductions for housing costs
D2090:Meaning of housing costs
D2091:Rules for third party deductions
D2093:Criteria to consider before deductions commence
D2094:Amount of deduction
D2097:Deduction in respect of owner occupier payments
D2098:Priority of deductions
Third party deductions for rent and service charges included in rent
Definitions
D2111:Meaning of rent payments
D2112:Meaning of exempt accommodation
D2113:Meaning of service charges
D2116:Rules for third party deductions
D2120:Criteria to consider before deductions commence
D2121:Amount to be deducted
D2124:Cessation of deductions
Third party deductions for fuel costs
D2130:Definition of fuel item
D2131:Rules for third party deductions
D2132:Criteria to consider before deductions commence
D2133:Amount to be deducted
D2137:Fuel - current consumption
D2141:Exception to general rules
D2143:When deductions should cease
D2145:Joint tenants
D2147:Priority between fuel debts
D2152:Consent required
D2153:Superseding the third party deduction decision
Third party deductions for water charges - England, Wales & Scotland
Definitions
D2165:Meaning of water charges
D2166:Meaning of water undertaker
D2167:Methods of charging
Rules for third party deductions
D2169:Original debt
D2173:Criteria to consider before deductions commence
D2174:When deductions should cease
D2175:Amount to be deducted
D2181:Original debt recovered
D2182:Joint tenants
D2185:Consent required
Third party deduction in place of Child Support Maintenance - CTM
deductions
D2225:Introduction
D2227:Meaning of non-resident parent
D2228:Sufficient UC in payment
D2229:Number of deductions
D2230:Amount to be deducted
Third party deductions for eligible loan deduction scheme (ELDS)
D2240:Introduction
Definitions
D2260:Eligible benefit
D2261:Eligible lender
D2262:Eligible loan
D2263:Loan agreement
D2264:5% of the personal allowance
D2270:Rules for deductions from UC
D2271:Criteria to consider before deductions commence
D2272:Amount of deduction
Deductions from ESA or JSA
D2274:When there is insufficient UC in payment
D2275:When there is no award of UC
D2277:Prevention of duplicate deductions

Third party deductions for integration loan scheme
D2311:Introduction
Definitions
D2321:Integration loan - recoverable by deductions from UC
D2322:Rules for deductions from benefit
D2323:Criteria to consider before deductions commence
D2324:Amount of deduction
Third party deductions for fines
D2341:Introduction
D2342:Application for deductions
D2348:Contents of application
Can a deduction be made?
D2349:UC, JSA & ESA
D2351:UC
D2357:Exceptions to standard rate deduction
D2359:JSA or ESA
D2361:Transitional Provisions
D2362:Order of priority
D2366:Further applications
Third party deductions for Council Tax
D2381:Introduction
D2382:Application for deductions
D2384:Contents of application
D2385:DMs action
Deductions
D2389:UC, JSA & ESA
D2393:UC
D2399:JSA or ESA
D2403:Transitional provisions
D2404:Maximum number of deductions
D2405:More than one application
Third party deductions for Community Charge
D2411:Introduction
D2413:Application for deductions
D2415:Contents of application
D2416:DMs action
Deductions
D2420:UC, JSA & ESA
D2425:UC
D2432:JSA or ESA
D2436:Order of priority
D2437:More than one application

Chapter D2: Third Party deductions UC, JSA & ESA

D2001 Introduction

The guidance in this chapter covers deductions (where appropriate) from
1. UC or
2. new style JSA (hereafter referred to as JSA) or
3. new style ESA.(hereafter referred to as ESA)
Note: ADM chapter M1 contains guidance on the meaning of new style JSA and
new style ESA.

D2002

This chapter covers third party deductions for
1. housing costs (see D2090)
2. rent and service charges included in rent (see D2111)
3. fuel costs (see D2130)
4. CT (see D2381) or CC (see D2411)
5. Fines (see D2341)
6. water charges (see D2165)
7. CTM (see D2225)
8. integration loans (see D2311)
9. ELDS (see D2240) Note: Guidance about deductions from benefit in respect of FRM & CMD can be found in ADM Chapter D3. Guidance in respect of deductions for loan interest
payments paid direct to a qualifying lender can be found in ADM Chapter D4.

D2003

When a decision is made to
1. start or
2. stop or
3. change
a deduction, this will be by way of a supersession of an earlier decision (see ADM
Chapter A4).

[D2004-D2008]

Definitions

D2009 Assessment period

Assessment
period (1) has the same meaning as defined at ADM E2110.

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 1(1), UC Regs, reg 21

[D2010]

D2011 Child Element

Child
element (1) means in relation to any claimant, any amount included in the award
of UC under specified legislation (2).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 1(1); 2 UC Regs, reg 24

D2012 Standard allowance

Standard
allowance (1) means in relation to any claimant, any amount included in the
claimant's award of UC under specified legislation (2).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 1(1); 2 WR Act 12, s 9(1)

D2013 Percentage of the standard allowance

Where the relevant percentage of the claimant's standard allowance results in the
fraction of a penny, that fraction is disregarded if it is less than half a penny.
Otherwise it is to be treated as a penny (1).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 1(2)

D2014 Water charges

Water
charges (1) means
1. in England and Wales, any water and sewerage charges under specified
legislation (2) and
2. in Scotland, any such charges established by Scottish Water under a charges
scheme made under specified legislation (3).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 1(1); 2 Water Industry Act 1991, part 5 chapter 1,
3 Water Industry (Scotland) Act 2002, s 29A

D2015 Work Allowance

In relation to any claimant, work allowance (1) means the amount applicable to that
claimant under specified legislation (2).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 1(1); 2 UC Regs, reg 22(2)

[D2016-D2018]

D2019 General

The DM may make deductions from an amount of the claimant's award of UC and
pay that amount to a third party (1), in accordance with specified legislation (2) to
discharge (in whole or part) a liability of the claimant to that third party.

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 2(1); 2 Sch 6

D2020

A payment made to a third party (1), in accordance with specified legislation (2), may be
made at such intervals as the DM may direct.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 2(2); 2 Sch 6

D2021 In the interest of the claimant

Third party deductions may be made from a claimant's award of UC if (1) the DM
considers it necessary to protect the interests of
1. the claimant or
2. their partner
or
3. a child or qualifying young person for whom the claimant or their partner (or
both) are responsible or
4. a severely disabled person, where the calculation of the claimant's UC award
includes an amount in respect of the fact that a claimant has regular and
substantial caring responsibilities for that severely disabled person.

1 UC, PIP, JSA & ESA (C&P) Regs, reg 58(1)

D2022

It will normally be in the interests of the claimant, to introduce third party deductions
if there is
1. a history of persistent mis-spending and
2. a threat of eviction or repossession and
3. no other suitable method of dealing with the debt.

D2023

Third party deductions will not normally be in the interests of the claimant, or any
child or adult dependant, if they
1. show evidence of determination to clear the debt or
2. undertake to clear the debt themselves.

D2024 Limitations applicable to deductions D2025 D2041

The DM may not deduct an amount from a claimant's award of UC and pay that
amount to a third party if, in any assessment period, that would
1. reduce the amount payable to the claimant to less than 1 penny (1) or
2. result in more than 3 deductions being made, in relation to that assessment
period, under one or more of the items listed in D2025 (2).

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 3(1)(a); 2 Sch 6, para 3(1)(b)

D2025 D2024 D2041 D2314

In accordance with D2024 2., there can be no more than 3 deductions made from
the claimant's award of UC at any one time (1), for one or more of the following (2)
1. housing costs
2. rent arrears and service charges included in rent
3. fuel costs
4. CC or CT
5. fines
6. water charges
7. CTM
8. integration loans
9. eligible loans
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 3(1)(b); 2 Sch 6, para 3(2)

D2026 Liability for debt

A debt may be disputed by the claimant. This is a factor for the DM to consider when
deciding whether they are liable to pay the debt. Although the Department cannot get
involved in the dispute, enquiries should be made of the third party.

D2027

Give the claimant the opportunity to provide evidence to support any claim that the
debt is not liable to be paid.

D2028

Deductions should only be made where there is evidence that the claimant is liable
to pay the debt. This may be provided by the creditor when a dispute has been
resolved or not upheld by any independent Regulatory body.

[D2029-D2030]

D2031 Consent required D2041

Unless the claimant consents, third party deductions cannot be made from a
claimant's award of UC in relation to any assessment period for
1. fuel costs (including arrears and current consumption) and
2. water charges (including arrears and current consumption)
where the total deduction for that item or any combination of those items exceeds
25% of the aggregate of the standard allowance and any child element (1).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 3(3)

D2032 Consent not required

The claimant's consent is not required, where a deduction, or a combination of
deductions are made for
1. housing costs
2. rent and service charges
3. CC or CT
4. fines
5. Payments in place of CSM
6. integration loans
7. eligible loans

[D2033-D2037]

Maximum amount

D2038 Insufficient UC D2039 D2042

With the exception of D2041, the DM may not deduct an amount from a claimant's
award of UC under one or more of the items within the priority list in D2043 if, in
relation to any assessment period, that would result in deducting an amount in
excess of 40% of the standard allowance (the maximum amount) from the
claimant's UC award (1).

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 4(1)

D2039

For the purposes of D2038, this includes awards where deductions have been made
in respect of (1)
1. those mentioned in the priority order listed at D2043 (2)
2. higher-level sanctions and other sanctions, under specified legislation (3)
3. recovery of payments on account under specified legislation (4)
4.
restrictions of payment of UC following conviction for a first or repeated benefit
fraud offence (5).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 4(2); 2 Sch 6, para 5(2);

3 WR Act 12 s 26 & 27; 4 SS A Act 92, s 71ZG; 5 SS Fraud Act 01, s 6B, 7 & 9

D2040

When determining whether the maximum amount of UC would be exceeded, no
account should be taken of any liability for continued consumption (1) of
1. fuel
costs (2) (see D2130) or
2. water
charges (3) (see D2165).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 4(3);

2 Sch 6, para 8(5)(b); 3 Sch 6, para 9(6)(b) or 9(7)(b)

D2041 D2038

Subject to guidance given in D2024, D2025 and D2031, where the DM considers it
to be in the claimant's best interest, and even though the deduction would result in
the maximum amount being exceeded, the DM may deduct an amount from the
claimant's UC award under
1. housing costs (see D2090)
2. rent and service charges included in rent (see D2111)
3. fuel costs (see D2130) and pay that amount to a third party (1). 1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 4(4)

D2042 Priority between debts

The priority order (see D2043) applies to a claimant where, in relation to any
assessment period (1)
1. a deduction could otherwise be made from the claimant's award of UC under
one or more of the deductions mentioned in D2043 (2) and
2. the amount of UC payable to the claimant
2.1 is insufficient to enable the DM to make deductions to meet all the
claimant's liabilities or
2.2 would exceed the 40% maximum (see D2038), were the required
deduction to be made (3).

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 5(1); 2 Sch 6, para 5(1)(a); 3 Sch 6, para 5(1)(b)

D2043 D2038 D2039 D2042 D2042 D2045 D2047 D2047 D2049 D2150 D2314 D2357 D2428 D2436 D3041

The priority order for deductions is (1)
1. housing costs (see D2090)2
2. rent and service charges included with rent (3) (see D2111)
3. fuel costs (4) (see D2130)
4. CT arrears (see D2411) or CC arrears (5) (see D2381)
5. fines (where the amount of the deduction equals 5% of the standard
allowance)6 (see D2341)
6. water charges (7) (see D2165)
7. payments in respect of CTM (8) (see D2225)
8. deductions from benefit in respect of FRM & CMD (9) (see ADM Chapter D3)
9. recovery of SF awards (10)
10. recoverable hardship payments (11)
11. HB and DWP administrative penalties (12)
12. HB, tax credit and DWP fraud overpayments (13)
13. HB and DWP civil penalties (14)
14. HB, tax credit and DWP non-fraud overpayments (15)
15. integration loans (16) (see D2311)
16. eligible loans (17) (see D2240)
17. fines (where the amount of the deduction exceeds the minimum amount that
may be deducted)18
Note: Conditionality Sanctions, Fraud Penalties and Advances of benefit will be
recovered before the priority order is applied.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 5(2); 2 Sch 6, para 6; 3 Sch 6, para 7; 4 Sch 6, para 8;
5 Community Charges (Deductions from IS)(No. 2) Regs 1990, reg 3,
Community Charges (Deductions from IS) (Scotland) Regs 1989, reg 3,
Council Tax (Deductions from IS) Regs 1993, reg 5; 6 Fines (Deductions from IS) Regs 1992, reg 4;
7 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 9; 8 Sch 6 para 10; 9 Sch 7; 10 SS A Act 92, s 78(2);
11 WR Act 12, s 71ZH(1)(a) or (b); 12 SS A Act 92, s 115A, s 71, s 75 & s 71ZB;
13 SS A Act 92, s 71, s 71ZC & s 75(4); 14 SS A Act 92, s 115C(4) & s 115D(4);
15 SS A Act 92, s 71, s 71ZC & s 75(4); 16 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 12;
17 Sch 6, para 11, 18 Fines (Deductions from IS) Regs 1992, reg 4

D2044

Where the priority of deductions between debts applies to the claimant, the DM must
make a deduction under the items listed in the priority order, by having regard to the
circumstances in D2045 to D2046 (1).

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 5(3)

D2045 D2044

The DM must give priority to any such deductions in the order in which they are
listed in D2043, with housing costs having priority (1).

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 5(4)

D2046 D2044

Unless the DM directs otherwise, where items are grouped together within the
priority order list and more than one deduction within that group applies to the
claimant,
1. those deductions have equal priority with each other and
2. the amount of such deductions are to be apportioned accordingly (1).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 5(5)

Example

Vanessa requires deductions in respect of a WTC overpayment and DWP non-fraud
overpayment. Overpayment deductions attract a maximum recovery rate of 15% of
the claimant's UC standard allowance. However as these two items are grouped
together within one of the listed items in the priority order (D2043 14.), the deduction
amount must be divided between the two organisations.

D2047

An overpayment is the result of fraud, for the purposes of D2043 12. and D2043 14.
if, in relation to that overpayment or that part of it, the claimant has (1)
1. been found guilty of an offence whether under statute or otherwise (2) or
2. made an admission after caution of deception or fraud for the purpose of
obtaining (3)
2.1
benefit under specified legislation (4), or
2.2
tax credit under specified legislation (5) or
3. agreed to pay an administrative penalty (6) under specified legislation (7) and the
agreement has not been withdrawn.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 5(6); 2 Sch 6, para 5(6)(a); 3 Sch 6, para 5(6)(b);
4 SS A Act 92; 5 Tax Credits Act 2002; 6 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 5(6)(c);
7 SS A Act 92, s 115A

D2048

D2049 Exceptions to standard rate deduction

The exceptions to amounts being deducted which equal 5% of the standard rate are
1. deductions for fines under D2043 17.1, where the amount of the deduction
exceeds the minimum amount that may be deducted for a fine under specified
legislation (2) or
2. deductions for the current consumption of mains gas, mains electricity or
water.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 5(2)(q); 2 Fines (Deductions from IS) Regs 92, reg 4

D2050 Superseding a third party deduction decision

When a relevant change of circumstances occurs (1) the DM may supersede the
outcome decision which includes the third party deduction decision, for example
where the
1. fuel charges or water charges change or
2. rent arrears are cleared or
3. entitlement to UC is reduced below the amount of the deduction plus 1p or
4. claimant changes address.
Note: This list is not exhaustive. For effective dates of supersession see ADM
Chapter A4.
1 SS Act 98, s 10; UC, PIP, JSA & ESA (D&A) Regs, reg 18

[D2051-D2089]

Third party deductions for housing costs

D2090 Meaning of Housing Costs D2002 D2041 D2043 D4001

For third party deduction purposes, housing costs are
1. owner occupier payments (see ADM chapter F2044) which are
1.1
loan interest payments (see ADM chapter F2046) or
1.2
alternative finance payments (see ADM chapter F2047) or
2. service charge payments (see ADM chapter F2050 et seq) or
3. payments under shared ownership schemes (see ADM chapter F2020 -
F2021)
Note:
Ground rent payments are not met under UC.

D2091 Rules for third party deductions

Housing costs may be deducted from UC and paid direct (1), where in any assessment
period, the claimant is in debt for any item of housing costs that is included in the
claimant's award of UC (2) under specified legislation (3).

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 6(1); 2 Sch 6, para 6(2); 3 UC Regs, Sch 5

[D2092]

D2093 Criteria to consider before deductions commence

Deductions should only be made where the DM is satisfied that two month's arrears
have accrued.

D2094 Amount of deduction

Subject to D2095, in respect of any debt mentioned in D2092 and in relation to that
assessment period, the DM may (1)
1. deduct an amount equal to 5% of the standard allowance from the claimant's
award and
2. pay that amount to the person to whom any such debt is owed.

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 6(3)

D2095 D2094

Before the DM may commence (or re-commence) deductions in respect of any such
debt, the claimant's earned income (or in the case of joint claimants their combined
earned income), in relation to the previous assessment period, must not exceed the
work allowance (1).

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 6(4)

D2096

Deductions should only be made where the DM is satisfied that there are in fact
arrears 1 of housing costs. In cases of dispute the DM should give the claimant the
opportunity to provide evidence to support any claim that they are not in arrears.
1 R(IS) 14/95

D2097 Deduction in respect of owner occupier payments

No amount may be deducted (1) in respect of owner occupier payments as defined
within specified legislation (2), in any case where those payments
1. are paid directly to a qualifying lender under specified legislation (3) or
2. would have been required to be paid to a body which, or person who, would
otherwise have been a qualifying lender but for an election given under
specified legislation (4).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 6(5); 2 UC Regs 13, Sch 1, para 4;
3 UC, PIP, JSA & ESA (C&P) Regs, reg 59; 4 Sch 5, para 10

D2098 Priority of deductions

As between liability (1) for items of housing costs, liabilities in respect of owner
occupier payments as defined within specified legislation (2), are to have priority over
all other items.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 6(6); 2 UC Regs, Sch 1, para 4(1)

Example

Paul is a leaseholder, having a secured loan from a lender who is not part of the loan
interest direct scheme. He is in arrears for his loan interest. Paul also pays an
annual service charge to his landlord, which is also in arrears. The deduction in
respect of his loan interest arrears will take priority over the deduction in respect of
his service charge arrears, where both deductions cannot be taken at the same
time.

[D2099-D2110]

Third party deductions for Rent and Service Charges included in rent
Definitions

D2111 Meaning of Rent Payments D2002 D2041 D2043 D2167

For the purposes of making deductions in respect of rent and services charges, rent
payments includes (1) any elements included in the claimant's rent which would not fall
to be treated as
1. rent under specified legislation (2) or
2. rent payments under specified legislation (3).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 7(8); 2 HB Regulations 06; 3 UC Regs 13

D2112 Meaning of exempt accommodation

Exempt
accommodation (1) has the same meaning as that given in specified
legislation (2). That meaning is defined in full at ADM Chapter F2033.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 7(8); 2 UC Regs, reg 1

D2113 Meaning of service charges

For the purposes of TPDs, service charges include (1) any items in a charge for
services in respect of accommodation occupied by the claimant, which would not be
treated as service charges under specified legislation (2). Service charge payments
under that specified legislation are defined at ADM Chapter F2050 - F2053.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 7(8); 2 UC Regs 13

[D2114-D2115]

D2116 Rules for third party deductions

Deductions for rent and service charges can be made and paid direct to the person
to whom the debt is owed, where the claimant satisfies all the conditions in D2117 to

D2119 D2118

(1).
Note: when considering third party deductions for rent arrears, the DM should also
refer to operational guidance for criteria when payment exceptions are appropriate in
respect of rent payments.

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 7(1)

D2117 D2116

The first condition (1) is that in any assessment period, the claimant
1. has an award of UC which includes (2) an amount for the housing element for
renters made under specified legislation (3) or
2. occupies exempt accommodation (4) and has an award of HB made under
specified legislation (5).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6 , para 7(2); 2 Sch 6, para 7(2)(a); 3 UC Regs 13, Sch 4;

4 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 7(2)(b); 5 SS CB Act 92, s 130

D2118

The second condition (1) is that in any assessment period the claimant is in debt for any
1. rent
payments (2) or
2. service charges which are paid with, or as part of the claimant's rent (3).

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 7(3); 2 Sch 6, para 7(3)(a); 3 Sch 6 , para 7(3)(b)

D2119
The third condition is that the claimant occupies the accommodation to which the
debt relates (1).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 7(4)

D2120 Criteria to consider before deductions commence

Deductions should only be made where the DM is satisfied that two month's arrears
have accrued.

D2121 Amount to be deducted

Where deductions for rent payments and service charge payments apply, subject to

D2122

and D2124, the DM may deduct, in relation to that assessment period, an
amount from the claimant's award, equal to 5% of the standard allowance and pay
that amount to the person to whom the debt is owed (1).

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 7(5)

D2122
Before the DM commences or re-commences making deductions (1) in respect of such
a debt
1. the claimant's earned income or
2. in the case of joint claimants, their combined earned income
in relation to the previous assessment period, must not exceed the work allowance.

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 7(6)

D2123

Deductions should only be made where the DM is satisfied that the claimant does
have arrears (1). In cases of dispute the DM should give the claimant the opportunity to
provide evidence to support any claim that they do not have arrears.
1 R(IS) 14/95

D2124 Cessation of deductions D2122

Deductions for rent and service charge payments included in the rent must be
stopped (1) if
1. the claimant's earned income or
2. in the case of joint claimants, their combined earned income
equals or exceeds the work allowance for three assessment periods immediately
preceding the date on which the next deduction could be made.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 7(7)

[D2125-D2129]

Third party deductions for fuel costs

D2130 Definition of fuel item D2002 D2040 D2041 D2043

Fuel item means (1) any charge for
1. mains gas, including the reconnection of mains gas and
2. mains electricity, including any charges for the disconnection and
reconnection of mains electricity and any payments required to be made under
a green deal plan within the meaning of specified legislation (2).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 8(8); 2 Energy Act 2011, s 1

D2131 Rules for third party deductions

Third party deductions may be made and paid direct to the fuel company for any fuel
item (1) where the claimant is in debt in respect of that fuel item (2).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 8(1); 2 Sch 6, para 8(2)

D2132 Criteria to consider before deductions commence

Before third party deductions can be made for a fuel item, arrears equal to 25% of
the claimant's standard allowance of UC must have accrued.

D2133 Amount to be deducted D2145

Where deductions for fuel costs apply, subject to D2135 and D2144, the DM may
1. deduct the amount set out in D2134 from the claimant's award, in relation to
that assessment period and
2. pay that amount to the person to whom the debt is owed (1).

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 8(3)

D2134 D2133 D2137

The amount which may be deducted in respect of any fuel item is (1)
1. an amount equal to 5% of the standard allowance and
2. an additional amount, which the DM estimates is equal to the average monthly
cost necessary to meet
2.1 the claimant's continuing need for the fuel in respect of which the debt
arose, plus
2.2 such monthly amount required to meet any payments under a green
deal plan,
except where current consumption is paid for by other means such as a pre
paid meter.

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 8(4)

D2135 D2133

Before any deduction commences or re-commences in respect of such a debt (1)
1. the claimant's earned income or
2. in the case of joint claimants, their combined earned income
in relation to the previous assessment period, must not exceed the work allowance.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 8(5)

D2136

D2137 Fuel - current consumption D2145

Where the circumstances in D2134 2. apply and deductions begin, the fuel company
will provide an estimate of the average monthly cost of continuing consumption. If
the estimate is unreasonable or inaccurate the DM should ask for details of the
calculation.

D2138

Periodically the fuel company will
1. recalculate the monthly amount needed to meet continuing consumption and
2. notify the DM of any added credit or debit.

D2139

The original debt must not be adjusted to take account of additional credit or debit.

D2140

Where there is a genuine increase in fuel costs, and this increase results in a
request for an increased deduction for continued consumption, the DM must see
evidence of the increase from the fuel company, in order to calculate the new
monthly amount.

D2141 Exception to general rules

A prepayment meter may have been installed or other arrangements made with the
fuel board to pay for current consumption. The amount deducted should then be
limited to the amount for arrears. See D2142 where the meter is calibrated to
recover arrears.

D2142 D2141

The claimant may ask for a prepayment meter as an alternative to third party
deductions. The fuel company may be willing to install a meter calibrated to recover
the arrears. The DM should consider which arrangement would best suit the
interests of the claimant or any child or adult dependant. Only one of these
arrangements can be in operation at any time.

D2143 When deductions should cease D2154

Deductions for normal consumption must cease when deductions for arrears
ceases. This may be because the arrears are fully repaid.

D2144 D2133

In relation to three assessment periods immediately preceding the date on which the
next deduction could be made, deductions for fuel costs must stop (1), if
1. the claimant's earned income or
2. in the case of joint claimants, their combined earned income
equals or exceeds the work allowance.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 8(6)

D2145 Joint tenants

A claimant asking for third party deductions for a fuel item may be a joint tenant. If
the claimant is liable for the debt, the deduction should be
1. the consumption figure (see D2137) divided by the number of people named
on the bill (whether they are claimants or not) and
2. the fixed amount to pay off any arrears (see D2133).

D2146

It is unusual to have more than one name on a fuel bill. If the claimant is the only
person named, the other tenants should pay their share of the bill to the claimant. If
the claimant is not named on the bill, the claimant is not liable. The claimant should
pay a share to the tenant who is named on the bill.

D2147 Priority between fuel debts D2148

The criteria may be met for deductions for both gas and electricity debts. But it may
not be possible to implement both deductions, where for example, the requested
deductions exceed the 40% maximum (an amount equal to 40% of the UC standard
allowance).

D2148

Where D2147 applies, the DM must decide which fuel debt takes priority, taking into
1 account
1. all the circumstances and
2. any requests of the claimant.

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 8(7)

D2149

Priority should be given to whichever fuel is most needed to ensure the health and
safety of the claimant or family.

Example 1

Ai Ling lives in a household where heating and cooking are by gas. The DM gives
priority to gas.

Example 2

Stanley lives with his wife and young child. The DM gives priority to electricity, so that
the home is properly lit.

Example 3

Maria lives with her elderly disabled mother. Cooking is by electric and heating is by
gas. The house has open fireplaces which can be used to provide heating. The DM
gives priority to electricity.

D2150

Where debts other than fuel are involved see D2043.

[D2151]

D2152 Consent required D2154

Unless the claimant consents, third party deductions cannot be made from a
claimant's award of UC in relation to any assessment period for
1. fuel costs (arrears plus ongoing consumption) and
2. water charges (arrears plus ongoing consumption)
where the total deduction for that item or any combination of those items, exceeds
25% of the aggregate of the standard allowance and any child element (1).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 3(3)

D2153 Superseding the third party deduction decision

The decision to implement deductions should not be superseded where the only
reason to do so is that the claimant wishes to take control of the budgeting. This is
because the claimant's desire to take control of the budgeting is not, in itself, a
relevant change of circumstances.

D2154

The DM should supersede the outcome decision which includes the third party
deduction decision for fuel costs, when a relevant change of circumstances occurs (1).
For example where
1. the average cost estimated for the continuing need was not enough or was
too much
2. the original debt has been cleared and deductions stop (see D2143)
3. the claimant changes fuel company and the debt is not transferable
4. the deduction for arrears and ongoing consumption would leave the claimant
with less than 1p
5. the claimant withdraws the agreement permitting deductions in excess of 25%
of the standard allowance applicable in the claimant's case (see D2152)
6. the claimant stops receiving a supply of fuel from the fuel company to whom
payment is being made, for example where the supply has been
disconnected due to meter interference. Or a claimant with deductions for gas
may move to a house which is all electric
7. it is no longer in the interests of the family for deductions to continue.
Note: See ADM Chapter A4 for rules about effective date of supersession.
1 SS Act 98, s 10, UC, PIP, JSA & ESA (D&A) Regs, reg 18

[D2155-D2164]

Third party deductions for water charges - England, Wales & Scotland
Definitions

D2165 Meaning of water charges D2002 D2040 D2043

Water charges means (1)
1. for England and Wales, any water or sewerage charges under prescribed
legislation (2) and
2. for Scotland, any such charges established by Scottish Water under a
charges scheme made under specified legislation (3).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 1; 2 Water Industry Act 1991, Part 5, Chapter 1;
3 Water Industry (Scotland) Act 2002, s 29A

D2166 Meaning of Water Undertaker

Water undertaker means (1)
1. in relation to any area in England and Wales, a company which has been
appointed under specified legislation (2) to be the water or sewerage undertaker
or
2. in respect of any area in Scotland, Scottish Water.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 9(9); 2 Water Industry Act 1991, s 6

D2167 Methods of charging

Water charges can be made
1. with rent (see D2111 et seq)
2. by a meter (see D2173 1.)
3. by means other than a water meter (see D2173 2.)

D2168

Rules for third party deductions

D2169 Original debt

Deductions may be made for water charges and paid direct (1), if the claimant is in
debt for water charges, including any charges for reconnection (the original debt)2.

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 9(1); 2 Sch 6, para 9(2)

D2170

Where deductions for water charges apply, subject to D2171 and D2174, the DM
1 may
1. deduct an amount from the claimant's award in accordance with D2175 to

D2177 D2176

and
2. pay it to
2.1 the water undertaker to whom the payment is due or
2.2 to the person or body authorised to collect water charges for that
undertaker.

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 9(3)

D2171 D2170

Before the DM commences or re-commences deductions in respect of such a debt (1)
1. the claimant's earned income or
2. in the case of joint claimants, their combined earned income in relation to the previous assessment period, must not exceed the work allowance.

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 9(4)

D2172

Debt in this context includes disconnection and reconnection costs and any legal or
other costs arising from that debt.

D2173 Criteria to consider before deductions commence D2167 D2167

Before third party deductions can be made for water, arrears equal to 25% of the
claimant's standard allowance of UC must have accrued.

D2174 When deductions should cease D2170

In relation to three assessment periods immediately preceding the date on which the
next deduction could be made, deductions for water charges must stop (1), if
1. the claimant's earned income or
2. in the case of joint claimants, their combined earned income
equals or exceeds the work allowance.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 9(5)

D2175 Amount to be deducted D2170 D2176 D2176 D2178 D2182

Where water charges are determined by a water meter (1), the amount of the
deduction, in relation to any assessment period, is
1. a amount equal to 5% of the standard allowance, until the original debt is
discharged and
2. an additional amount which the DM estimates to be the average monthly cost
necessary to meet the claimant's continuing need for water consumption.

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 9(6)

D2176

Where water charges are determined by means other than a water meter (1), the
amount of third party deduction, in relation to any assessment period, under this
paragraph is
1. the amount referred to in D2175 1. and
2. an additional amount equal to the cost necessary to meet the continuing need
for water consumption in that assessment period.

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 9(7)

D2177
Where the claimant is in debt to two water undertakers (1)
1. only one amount under D2175 1. or D2176 1. may be deducted and
2. a deduction in respect of the original debt for sewerage charges may only be
made after the whole of the original debt for water has been paid and
3. deductions for continuing charges for both water and sewerage charges may
be made at the same time.

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 9(8)

D2178

The DM should always use the amount in D2175 1. to clear the arrears, even where
1. there is a court order for a greater amount or
2. the claimant asks that a higher amount be paid direct.

[D2179-D2180]

D2181 Original debt recovered

Deductions for normal water consumption must cease when deductions for arrears
of water charges ceases, for example when the arrears have been fully repaid.

D2182 Joint tenants

A claimant asking for third party deductions for water charges may be a joint tenant.
If the claimant is liable for the debt the deduction should be
1. the actual or estimated monthly cost for consumption divided by the number of
people named on the bill, whether they are claimants or not and
2. the amount to be deducted to pay off any arrears (see D2175).

D2183

It is unusual to have more than one name on a bill. If the claimant is the only person
named, the other tenants should pay their share of the bill to the claimant. If the
claimant is not named on the bill, the claimant is not liable. The claimant should pay
a share to the tenant who is named on the bill.

[D2184]

D2185 Consent required D2186

Unless the claimant consents, third party deductions cannot be made from a
claimant's award of UC in relation to any assessment period for
1. fuel costs (arrears plus ongoing consumption) and
2. water charges (arrears plus ongoing consumption)
where the total deduction for that item or any combination of those items, exceeds
25% of the aggregate of the standard allowance and any child element (1).

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 3(3)

D2186

The claimant's agreement should be obtained if the new total deductions exceed the
level mentioned in D2185. Where the claimant has already consented to a total
above that level, any increase will require the claimant's further consent.

[D2187-D2224]

Third Party deductions in place of payments of child support maintenance - CTM deductions

D2225 Introduction D2002 D2043 D2226 D3010

When an application for CSM is made, a Child Maintenance Service DM must make
a maintenance assessment. If the NRP receives UC, that maintenance assessment
is nil. In such a case, the NRP does not have to pay any maintenance. The NRP
may instead be liable for payments in place of payments of CSM (CTM)1.

1 Child Support Act 91, s 43; Child Support (Maintenance Assessments and Special Cases) Regs 92, reg 28

D2226

Where the circumstances in D2225 apply in relation to the claimant, the UC DM may
make deductions for CTM (1).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 10(1)

D2227 Meaning of non-resident parent

Non-resident
parent (1) means
1. that parent which is not living in the same household with the child and
2. the child has his home with a person who is, in relation to him, a person with
care.
1 CS Act 91, s 3(2)

D2228 Sufficient UC in payment

Where the NRP is liable for deductions for payments of CTM and there is sufficient
UC in payment (1), the UC DM must (subject to specified legislation (2)) determine that
an amount is to be deducted from the claimant's award and paid to the PWC.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 10(2); 2 Sch 6, para 1, para 4 & para 5

D2229 Number of deductions

Only one deduction for payments in respect of CTM can be made in relation to any
assessment period (1).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 10(3)

D2230 Amount to be deducted

The amount of UC which may be deducted in relation to any assessment period and
paid to a third party is an amount equal to 5% of the standard allowance (1).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 10(4)

[D2231-D2239]

Third party deductions for eligible loan deduction scheme (ELDS)

D2240 Introduction D2002 D2043

The ELDS was introduced from 27.12.06. It is a scheme whereby repayment of
loans made to claimants by certain lenders can be made by deductions from benefit.

D2241

The purpose of ELDS is to make low cost loans more accessible to those on low
incomes who may not be able to use mainstream financial services. It aims to
achieve this by reducing the debt recovery risk of lending to low income claimants.

[D2242-D2259]

Definitions

D2260 Eligible benefit

Eligible benefit means (1)
1. UC or
2. new style JSA (hereafter referred to as JSA) or
3. new style ESA.(hereafter referred to as ESA)
Note: ADM chapter M1 contains guidance on the meaning of new style JSA and
new style ESA.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 11(8)(a) to (c)

D2261 Eligible lender

Eligible lender means (1)
1. a credit union within the meaning of specified legislation (2) or
2. one of the following bodies provided it is licensed under specified legislation (3)
2.1 an Industrial or Provident Society registered under specified legislation (4)
or
2.2 a charitable institution within the meaning of specified legislation (5) or
2.3 a body entered on the Scottish Charity Register under specified
legislation (6) or
3. a community interest company within the meaning of specified legislation (7)
which may be determined by the Secretary of State as an appropriate body to which
payments on behalf of the claimant may be made in respect of loans made by that
body.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 11(8); 2 Credit Unions Act 1979, s 1;
3 Consumer Credit Act 1974; 4 Industrial and Provident Societies Act 1965, s 1;
5 Charities Act 1992, s 58(1); 6 Charities and Trustee Investment (Scotland) Act 2005, s 3;
7 Companies (Audit, Investigations and Community Enterprise) Act 2004, Part 2

D2262 Eligible loan

An eligible loan is (1) a loan made by a lender to the borrower, who is at the time the
loan was made, an eligible lender, except loans which are
1. secured by a charge or pledge or
2. for the purposes of business or self-employment or
3. made by means of a credit card.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 11(8)

D2263 Loan agreement

Loan agreement means (1) an agreement between the eligible lender and the claimant
in respect of an eligible loan.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 11(8)

D2264 5% of the personal allowance

5% of the personal allowance means (1) in those cases where that percentage is not a
multiple of 5 pence, the sum obtained by rounding that percentage to the next higher
such multiple.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 11(8)

[D2265-D2269]

D2270 Rules for deductions from UC

The DM may make deductions from UC where in any assessment period, the
claimant is in arrears in respect of a loan agreement entered into (whether solely or
jointly) with an eligible lender in respect of an eligible loan (1).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 11(1)

D2271 Criteria to consider before deductions commence D2272

Before third party deductions under ELDS can be made, arrears equivalent to two
months of the claimant's standard allowance of UC must have accrued.

D2272 Amount of deduction

Where the claimant has an award of UC, the DM may (1)
1. deduct, in relation to any assessment period referred to in D2271 1., an
amount from the claimant's UC equal to 5% of the standard allowance and
2. pay that amount to the eligible lender towards discharging the amount owing
under the loan agreement.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 11(4)

D2273

Deductions from ESA or JSA

D2274 When there is insufficient UC in payment

No deductions may be made from the claimant's UC, in relation to that assessment
period, where (1)
1. the amount of the claimant's UC is insufficient to enable such a deduction to
be made and
2. the claimant has been awarded ESA or JSA
but instead, deductions may be made from the claimant's ESA or JSA, at a weekly
amount equal to 5% of the personal allowance for a single claimant aged not less
than 25, and pay that amount to the eligible lender.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 11(5)

Example

Judith and Nora make a joint claim to UC (both are over the age of 25). Judith is
entitled to JSA of 71.70 per week. As Nora has part-time earnings, their UC is
12.00 per month. The DM receives an application from an eligible lender for a
deduction to be made under ELDS. The DM calculates that the amount of a 5%
deduction in relation to the claimant's standard allowance of UC would be 24.50
(5% of 489.06 - rounded up to next 5 pence). As there is insufficient UC in
payment to enable the monthly deduction to be made, the DM determines that the
deduction may be made from Judith's weekly award of JSA (i.e. 3.60 per week).

D2275 When there is no award of UC

Where the claimant has not been awarded UC, but has an award of (1)
1. ESA or
2. JSA
the DM may deduct a weekly amount equal to 5% of the personal allowance for a
single claimant aged not less than 25 from any such award, and pay that amount to
the eligible lender.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 11(6)

Example

Alfie and Denise make a joint claim to UC. They live with Denise's parents. Alfie is
entitled to JSA of 71.70 per week. Denise is in receipt of CA of 59.75 per week.
As both JSA and CA are both taken fully into account when calculating UC, no UC is
payable. The DM receives an application from an eligible lender for deductions to be
made under the ELDS and decides that the deduction can be made from Alfie's JSA.

D2276

The DM should not take deductions from ESA or JSA if it reduces the amount
payable to the claimant to less than 10 pence (1).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6 , para 11(7)

D2277 Prevention of duplicate deductions

Where the borrower is in receipt of
1. UC or
2. new style ESA or
3. new style JSA
no deduction will be made from an eligible benefit paid under specified legislation (1),
unless the amount of benefit at 1., 2. or 3. is insufficient to meet the deduction (see
DMG 33821 (IS/JSA(IB)) and DMG 46584 (ESA)).
1 SS (C&P) Regs, Sch 9, para 7C(2)

Example

Petra is entitled to CA of 59.75 per week and UC of 197.33 per month. The DM
receives an application from an eligible lender for deductions under ELDS and
calculates 5% of Petra's standard allowance of UC as being 15.58. The DM
decides that the deduction should be taken from Petra's UC as there is sufficient UC
in payment to meet the deduction.

[D2278-D2310]

Third party deductions for integration loan scheme

D2311 Introduction D2002 D2043

The Integration Loan Scheme is a HO designed initiative to help individuals and their
dependants settle into the community following a decision to grant them refugee
status or humanitarian protection in the UK. The initiative is intended to provide
interest free loans (1) to buy goods and services which will assist integration (e.g.
essential household items, training) to certain groups.

1 The Integration Loans for Refugees and Others Regulations 2007, SI 2007 No. 1598

D2312

The Integration Loan Scheme replaces the refugee back payment scheme which
ceased on 14.6.07. The new scheme commenced on 11.6.07.

D2313

The HO will deal with loan applications and decide who is eligible and the amount to
be awarded. Payment of the loan and subsequent recovery action will be undertaken
by Debt Management.

D2314

Deductions for the Integration Loan Scheme will be subject to normal third party
deduction rules on maximum number of deductions (see D2025), and are included
in the priority order (see D2043).

[D2315-D2320]

Definitions

D2321 Integration loan - recoverable by deductions from UC

Integration loan which is recoverable by deductions means (1) an integration loan
made under specified legislation (2) which is recoverable from the claimant by
deductions from UC under that specified legislation.
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 12(4);
2 The Integration Loans for Refugees and Others Regs 2007, reg 9

D2322 Rules for deductions from benefit

Deductions for Integration loans may be applied where the claimant has an
integration loan which is recoverable by deductions (1).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 12(1)

D2323 Criteria to consider before deductions commence

Deductions should only be made where the DM is satisfied that two month's arrears
have accrued.

D2324 Amount of deduction

The rate of deduction for the Integration Loan Scheme, in any assessment period, is
an amount equal to 5% of the standard allowance (1).

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 12(4)

D2325

Couples may take out a joint loan and so have joint liability for repayment of the
debt (1). If the couple separate, deductions can be taken from either partner. The HO
will be responsible for deciding the liability of joint loan applicants who separate.

1 The Integration Loans for Refugees and Others Regulations 2007, SI 2007 No. 1598

D2326

The claimant should be left with at least 1p UC after third party deductions have
been made (1).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 3(1)(a)

[D2327-D2340]

Third party deductions for fines

D2341 Introduction D2002 D2043

A court may, after enquiring into an offender's means, find that an offender is
claiming UC, new style JSA or new style ESA. The court may then request
deductions for payment of an offender's fines, costs, a compensation order or a
confiscation order (1). Deductions for fines may be made from
1. UC or
2. new style JSA (hereafter referred to as JSA) or
3. new style ESA.(hereafter referred to as ESA)
Note: ADM chapter M1 contains guidance on the meaning of new style JSA and
new style ESA.
1 Fines (Deductions from IS) Regs 92, reg 2

D2342 Application for deductions

An application can be made by (1) any
1. magistrates court or fines officer in England and Wales or
2. court in Scotland.

1 Fines (Deductions from IS) Regs 92, regs 1(2) & 2(1)

D2343

Fines
officer (1) means the officer of the court responsible for enforcing payment of the
sum due.

1 Courts Act 2003

D2344

It is an offence (1) to fail to provide information essential to making a deduction from
benefit application. This offence can only be established where the offender fails to
provide prescribed information (2) and is applicable in England and Wales only.

1 Courts Act 2003, s 96; 2 Fines (Deductions from IS) Regs 92

D2345

From 18.12.04 in England and Wales legislation was amended (1) so that the court
may require that the offender provide
1. their full name
2. their full address
3. their date of birth
4. their NI number and
5. the name of the benefits to which they are entitled
Note: In this context benefits means UC, JSA or ESA.

1 Fines (Deductions from IS) Regs 92, reg 2A

D2346

A court can transfer fines, costs, confiscation orders or compensation orders to
another court. The receiving court is then responsible for recovery and may apply for
third party deductions. However in some cases a court can retain responsibility for
collection of the fine when the offender moves outside the area. An application can
include more than one fine or compensation order, or combination of both.

D2347

From 3.7.06 in England and Wales DMs need to be aware that deductions for fines
can be considered without the offender's consent or existing default in cases where
there is an element of compensation in the court order (1).
1 Courts Act 2003, Sch 5, para 7A

D2348 Contents of application

The DM must be able to identify the claimant from the details on the application for
deductions, which should include (1)
1. the name, address and if known the date of birth of the offender
2. the date when the fine was imposed or the compensation order made
3. the name and address of the court concerned
4. the amount of the fine or compensation order
5. the date on which the application is made
6. the date on which the court enquired into the offender's means
7. in England and Wales, whether the offender
7.1 is an existing defaulter and his existing default cannot be disregarded
7.2 has consented to the making of the application (2) or
7.3 is in default on a collection order
8. in Scotland, whether the offender has defaulted in paying the fine,
compensation order or any instalment of either.
Note:
The validity of an application is a matter for the DM.
1 Fines (Deductions from IS) Regs 92, reg 3; 2 Courts Act 2003, Part 3, Sch 5
Can a deduction be made?

D2349 UC, JSA or ESA

A decision will be made on
1. whether there is enough benefit in payment and
2. the priority order for deductions and
3. the rate of deductions.

D2350

The court can withdraw an application at any time.

D2351 UC

No more than 3 third party deductions from UC may be in effect at any one time (1).

1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 3(1)(b)

D2352 D2353 D2354 D2355

Subject to D2353 and D2355, where an application is received from the court in
respect of an offender, the DM may deduct from UC, the relevant sum and pay that
sum to the courts towards satisfaction of the fine, or the sum required to be paid by
compensation order (1).

1 Fines (Deductions from IS) Regs 92, reg 4(1A)

D2353 D2352

No amount may be deducted under D2352 where it would reduce the amount of UC
payable to the offender to less than 1 penny (1).

1 Fines (Deductions from IS) Regs 92, reg 4(1B)

D2354 D2357

The relevant sum within D2352 means a sum amounting to no less than 5% of the
appropriate UC standard allowance and no greater than 108.351. For this purpose,
appropriate UC standard allowance means the appropriate UC standard allowance
under specified legislation (2).

1 Fines (Deductions from IS) Regs 92, reg 4(1C); 2 UC Regs, reg 20

D2355 D2352 D2356

The DM should make deductions under D2352 only (1) if
1. the offender is entitled to UC throughout any assessment period and
2. no deductions are made in respect of the offender under any other
application.

1 Fines (Deductions from IS) Regs 92, reg 7(1A)

D2356

For the purposes of D2355, assessment period (1) means the period prescribed in
specified legislation (2).
1 Fines (Deductions from IS) Regs 92, reg 7(1B); 2 UC Regs, reg 21 & reg 22

D2357 Exceptions to standard rate deduction D2358

The exception to deductions in respect of a fine which equal 5% of the standard
allowance of the claimant's UC is where
1. the maximum deduction rate for fines is being made under D2043 17. (see
also D2354) or
2. the deduction could be a nil amount, if other deductions are being made which are
2.1 higher in the priority order and
2.2 those deductions would make the total amount of deductions exceed
the 40% maximum rate.

D2358

With reference to D2357, where the maximum deduction rate of 108.35 is being
deducted, this amount will be reduced pound for pound, where other deductions are
also being taken, so the amount being deducted for the fine does not exceed the
overall maximum deduction rate of 40%.

D2359 JSA or ESA D2361

Subject to D2362 to D2364, where an application is received from a court in respect
of an offender who is entitled to
1. JSA or ESA and
2. the amount payable of that allowance, after any deduction for fines is made is
10 pence or more
the DM may deduct a sum from that benefit, up to the appropriate maximum amount
specified in D2360 and pay that sum to the to the court towards satisfaction of the
fine, or the sum required to be paid by compensation order (1).

1 Fines (Deductions from IS) Regs, reg 4(2)

D2360 D2359

Where the offender is entitled (1) to
1. JSA or
2. ESA
the appropriate maximum amount is 40% of the appropriate age-related amount for
that offender.
1 Fines (Deductions from IS) Regs, reg 4(2A)

D2361 Transitional provisions

From 01.04.13 transitional rules apply to D2359. Where there is no break in
entitlement when old style contributory JSA or ESA is migrated to new style JSA or
ESA, existing deductions at the point of migration will continue to be governed by the
old style JSA or ESA rules (1).
1 Fines, Council Tax, and Community Charge (Deductions from UC and Other Benefits) Regs 2012, reg 23

D2362 Order of priority D2359

Do not make a deduction from JSA for payment of an offender's fine or
compensation order if (1) deductions are being made for
1. CC arrears or
2. CT arrears.
1 Fines (Deductions from IS) Regs 92, reg 4(3)

D2363

D2364 D2359

In Scotland, the DM can make deductions only where
1. the offender has defaulted in paying the fine, compensation order, or an
instalment of either (1) and
2. at the time of application by the court the offender is aged 18 or over (2) and
3. the offender is entitled to JSA or ESA throughout any benefit week (3) and
4. no deductions are being made in respect of the offender under any other
application (4).

1 Fines (Deductions from IS) Regs 92, reg 7(2)(c); 2 reg 7(2)(a); 3 reg 7(1)(a) & (2)(b); 4 reg 7(1)(b)

D2365

From 27.3.06 in England and Wales, the legislation has been modified (1) to
1. allow deductions to be made from benefits for the purpose of recovering a fine
with the consent of the offender, whether or not he is in default
2. allow the fines officer as well as the court to apply to the Secretary of State for
deductions to be made
3. allow the automatic application for deductions from benefit either immediately
by the court (if the offender is an existing defaulter), or by the fines officer
upon first default on payment terms agreed with the court
4. enable the fines officer to apply for deductions from benefits as a further step
in enforcing a fine against a persistent defaulter, if it is appropriate to do so at
that stage in the enforcement process (e.g. if the offender has gone onto
benefits since the original repayment terms were set).
1 Fines (Deductions from IS) Regs 92, reg 4

D2366 Further applications

Further applications may be received when deductions are already being made for
fines. Further deductions can be made only when deductions on any earlier
application have ceased (1), or the court has withdrawn the application.
1 Fines (Deductions from IS) Regs 92, reg 7(5)

[D2367-D2380]

Third party deductions for Council Tax

D2381 Introduction D2002 D2043

Deductions for arrears of CT (1) may be made from
1. UC or
2. new style JSA (hereafter referred to as JSA) or
3. new style ESA.(hereafter referred to as ESA)
Note: ADM chapter M1 contains guidance on the meaning of new style JSA and
new style ESA.
1 Council Tax (Deductions from IS) Regs 93, reg 2(1)

D2382 Application for deductions

A billing authority (in Scotland, levying authority) may ask the DM to make
deductions for arrears of CT (1) covered by in
1. England and Wales, a liability order and
2. Scotland, a summary warrant or a decree.
1 Council Tax (Deductions from IS) Regs 93, regs 2 & 3;

Local Government Finance Act 1992, Sch 4, para 3 & Sch 8, para 6

D2383

In Scotland the warrant or decree may include an amount for arrears of water
charges (see D2215). Treat any such arrears as a single debt with the CT arrears.

D2384 Contents of application

The DM must be able to identify the claimant from the details on the application for
deductions, which should include (1) the
1. name and address of the debtor
2. name and address of the authority making the application
3. name and place of the court concerned
4. date of the order, warrant or decree
5. amount of the specified in the liability order, summary warrant or decree
6. total amount the authority wishes to have deducted.
Note:
The validity of an application is a matter for the DM.
1 Council Tax (Deductions from IS) Regs 93, reg 4

D2385 DMs action

Before deductions can be made, the DM must be satisfied that the claimant is a
debtor. A person is normally a debtor where there is
1. a liability order against them (in Scotland, a summary warrant or decree) and
2. an outstanding sum for which that liability order was made.

D2386

The application for deductions should include the claimant's details and can normally
be accepted as evidence that the person named is a debtor. This means that in
most cases the DM does not need to see the actual liability order or a certificate
from the LA showing the amount outstanding.

D2387

Where a debt is disputed on reasonable grounds the DM should investigate the
matter and may need to see the liability order and LA certificate. Note that a dispute
is not on reasonable grounds if claimants simply say that they are not a debtor.

D2388

The DM should consider any documentary evidence that may be produced showing
that liability is in doubt. Although the Department cannot get involved in any dispute,
enquiries should be made to the LA. If the DM is not satisfied that the claimant is a
debtor deductions should not be made. If deductions have already started the claim
should be revised or superseded (1) and deductions stopped. Normal overpayment
action should be taken if appropriate.
1 SS Act 98, s 9 & 10; UC, PIP, JSA & ESA (D&A) Regs, regs 5 & 18

Example

Blair gets UC and owns two cottages next door to each other. He lives in one
cottage and the other is empty. The LA obtains a liability order against him for CT
arrears on the empty cottage and makes a written application for deductions to be
made. After deductions start Blair produces a copy of a closure order on the empty
cottage showing that the cottage was closed as unfit for human habitation. The LA
confirms that the cottage was closed and that as a result no CT is owed for it. The
DM is not satisfied that Blair is a debtor. The claim is revised and deductions stop.
The effective date is the date the deduction commenced.
Deductions

D2389 UC, JSA & ESA

A decision will be made about
1. whether there is enough benefit in payment and
2. the priority order for deductions and
3. the rate of deductions.

[D2390-D2392]

D2393 UC D2394 D2395 D2396

Subject to D2394 and D2402, where an application is received from the court in
respect of a debtor, the DM may deduct from UC, the relevant sum and pay that sum
to the authority towards satisfaction of any outstanding sum which is or forms part of
the amount in respect of which the liability order was made, or the summary warrant
or decree was granted (1).

1 Council Tax (Deductions from IS) Regs 93, reg 5(1A)

D2394 D2393

No amount may be deducted under D2393 where it would reduce the amount of UC
payable to the debtor to less than 1 penny (1).

1 Council Tax (Deductions from IS) Regs 93, reg 5(1B)

D2395

The relevant sum (1) within D2393 means a sum amounting to 5% of the appropriate
UC standard allowance and for this purpose, appropriate UC standard allowance
means the appropriate UC standard allowance for the debtor under specified
legislation (2).

1 Council Tax (Deductions from IS) Regs 93, reg 5(1C); 2 UC Regs, reg 20

D2396 D2397

Deductions can be made from UC under D2393 only (1) if
1. the debtor is entitled to UC throughout any assessment period and
2. no deductions are being made in respect of the debtor under any other
application and
3. no payments are being made for Community Charge arrears under specified
legislation (2).
1 Council Tax (Deductions from IS) Regs 93, reg 8(1A);
2 Community Charges (Deductions from IS) (No. 2) Regs 90, reg 2;

Community Charges (Deductions from IS) (Scotland) Regs 89, reg 2

D2397

For the purposes of D2396, assessment period (1) means the period prescribed in
specified legislation (2).

1 Council Tax (Deductions from IS) Regs 93, reg 8(1B); 2 UC Regs, reg 21 or 22

[D2398]

D2399 JSA or ESA D2403

Subject to D2402 and D2405, where an application is received from an authority in
respect of a debtor who is entitled to
1. JSA or ESA and
2. the amount payable of that allowance, after any deduction for council tax is
made is 10 pence or more
the DM may deduct a sum from that benefit, up to the appropriate maximum amount
specified in D2400 and pay that sum to the to the authority towards satisfaction of
any outstanding sum which is, or forms part of the amount in respect of which the
liability order was made, or the summary warrant or the decree was granted (1).

1 Council Tax (Deductions from IS) Regs 93, reg 5(2)

D2400 D2399

Where the debtor is entitled (1) to
1. JSA or
2. ESA
the appropriate maximum amount is 40% of the appropriate age-related amount for
that debtor.
1 Council Tax (Deductions from IS) Regs 93, reg 5(2A)

D2401

D2402 D2393 D2399

The DM can make deductions only (1) where
1. the debtor is entitled to JSA or ESA throughout any benefit week and
2. no deductions are being made in respect of the debtor under any other
application and
3. no payments are being made for Community Charges under specified
legislation (2).
1 Council Tax (Deductions from IS) Regs 93, reg 8(1)

D2403 Transitional provisions

From 01.04.13, transitional rules (1) apply to D2399. Where there is no break in
entitlement when old style contributory JSA or ESA is migrated to new style JSA or
ESA, existing deductions at the point of migration will continue to be governed by the
old style JSA or ESA rules.
1 Fines, Council Tax, and Community Charge (Deductions from UC and Other Benefits) Regs 2012, reg 23

D2404 Maximum number of deductions

No more than 3 third party deductions from UC may be in effect at any one time (1).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 3(1)(b)

D2405 More than one application D2399

Only one application for deductions of CT can be dealt with at any one time (1). Only
one application may be received for the same debtor. Further referrals would be
returned to the council. Further deductions can be made only when deductions on
any earlier application have ceased.
1 Council Tax (Deductions from Benefit) Regs 93, reg 8(1)(b)

[D2406-D2410]

Third party deductions for Community Charge

D2411 Introduction D2002 D2043

LAs may request deductions for arrears of CC, where the person owing the debt is a
claimant entitled to (1)
1. UC, or
2. new style JSA (hereafter referred to as JSA) or
3. new style ESA.(hereafter referred to as ESA)
Note: ADM chapter M1 contains guidance on the meaning of new style JSA and
new style ESA.
1 Community Charges (Deductions from IS) (No. 2) Regs 90, reg 1(2);

Community Charges (Deductions from IS) (Scotland) Regs 89, reg 1(2)

D2412

Recoverable sums include any fines imposed because the person has failed to
provide information in connection with registration for the charge.

D2413 Application for deductions

Recovery of the arrears can be made if the billing authority (in Scotland, levying
authority) has obtained from a court
1. in England and Wales, a liability order (1) and
2. in Scotland, a summary warrant or a decree (2).
1 Community Charges (Deductions from IS) (No. 2) Regs 90, reg 2(1);

2 Community Charges (Deductions from IS) (Scotland) Regs 89, reg 2(1)

D2414

In Scotland the warrant or decree may include an amount for arrears of water
charges. Treat these arrears as a single debt with CC arrears.

D2415 Contents of application D2417

The DM must be able to identify the claimant from the details on the application for
deductions, which should include (1) the
1. name and address of the debtor, or where the liability is against a couple, the
names and addresses of both of them
2. name and place of the court concerned
3. date of the order, warrant or decree
4. amount of the specified arrears in the liability order
5. total amount the authority wishes to have deducted.
Note: The validity of an application is a matter for the DM.
1 Community Charges (Deductions from IS) (No. 2) Regs 90, reg 2(2);
Community Charges (Deductions from IS) (Scotland) Regs 89, reg 2(2)

D2416 DM's action

Before deductions can be made the DM must be satisfied that the claimant is a
debtor. A person will normally be a debtor where there is
1. a liability order against them (in Scotland, a summary warrant or decree) and
2. an outstanding sum for which that liability order was made.

D2417

The application for deductions should include these details (see D2415) and can
normally be accepted as evidence that the person named is a debtor. This means
that in most cases the DM does not need to see the actual liability order or a
certificate from the LA showing the amount outstanding.

D2418

Where a debt is disputed on reasonable grounds the DM should investigate the
matter and may need to see the liability order and LA certificate. Note that a dispute
is not on reasonable grounds if claimant's simply say that they are not a debtor.

D2419

The DM should consider any documentary evidence that may be produced showing
that liability is in doubt. Although the Department cannot get involved in any dispute,
enquiries should be made to the LA. If the DM is not satisfied that the claimant is a
debtor deductions should not be made. If deductions have already started the claim
should be revised or superseded (1) and deductions stopped. Normal overpayment
action should be taken if appropriate.
1 SS Act 98, s 9 & s 10; UC, PIP, JSA & ESA (D&A) Regs, regs 5 & 18

Example

Ruth is in receipt of UC. The LA obtains a liability order against her for CC arrears of
200 and makes a written application for deductions to be made from Ruth's UC.
Ruth produces an account from the same LA acknowledging that they owe her 50
rather than her owing them anything. The DM is not satisfied that Ruth is a debtor
and determines that deductions for CC arrears should not be made.
Deductions

D2420 UC, JSA & ESA

A decision will be made about
1. whether there is enough benefit in payment and
2. the priority order for deductions and
3. the rate of deductions.

[D2421-D2424]

D2425 UC D2428 D2429

Subject to D2428 and D2429, where
1. an application is received from an authority in respect of an debtor who is
entitled to UC and
2. the amount payable by way of UC, after a deduction for community charge, is
1 penny or more
the DM may deduct from UC, a sum which is equal to 5% of the appropriate UC
standard allowance and pay that sum to the authority towards satisfaction of any
outstanding sum which is, or forms part of, the amount in respect of which the
liability order was made (1).
1 Community Charges (Deductions from IS) (No. 2) Regs 90, reg 3(1A),

Community Charges (Deductions from IS) (Scotland) Regs 89, reg 3(1A)

D2426

Appropriate UC standard allowance (1) means the appropriate UC standard allowance
for the debtor under specified legislation (2).
1 Community Charges (Deductions from IS) (No. 2) Regs 90, reg 3(1B),

Community Charges (Deductions from IS) (Scotland) Regs, 89, reg 3(1B); 2 UC Regs, reg 20

D2427

Where the sum to be deducted for community charge is not a multiple of 5 pence, it
should be rounded to the next higher such multiple (1).
1 Community Charges (Deductions from IS) (No. 2) Regs 90, reg 3(3),

Community Charges (Deductions from IS) (Scotland) Regs 89, reg 3(3)

D2428 D2425

Before making a deduction under D2425, the priority order in D2043 will be applied.
1 Community Charges (Deductions from IS) (No. 2) Regs 90, reg 3(4A),

Community Charges (Deductions from IS) (Scotland) Regs 89, reg 3(4A)

D2429 D2425 D2430

Deductions can be made from UC under D2425 only (1) if
1. the debtor is entitled to UC throughout any assessment period and
2. no deductions are being made in respect of the debtor under any other
application.
1 Community Charges (Deductions from IS) (No. 2) Regs 90, reg 4(1A),

Community Charges (Deductions from IS) (Scotland) Regs 89, reg 4(1A)

D2430

For the purposes of D2429, assessment period (1) means the period prescribed in
specified legislation (2).
1 Community Charges (Deductions from IS) (No. 2) Regs 90, reg 4(1B),

Community Charges (Deductions from IS) (Scotland) Regs, 89, reg 4(1B); 2 UC Regs, reg 21 or 22

[D2431]

D2432 JSA or ESA D2433 D2434

Subject to D2433 and D2434, where
1. an application is received from an authority in respect of a debtor who is
entitled to JSA or ESA and
2. the amount of JSA or ESA payable before any deduction for community
charge, is equal to, or more than one third of the age-related amount
applicable to the debtor
the DM may deduct a sum from that benefit which is equal to one third of the age-
related amount applicable to the debtor and pay that sum to the authority towards
satisfaction of any outstanding sum which is, or forms part of, the amount in respect
of which the liability order was made (1).
1 Community Charges (Deductions from IS) (No. 2) Regs 90, reg 3(2);

Community Charges (Deductions from IS) (Scotland) Regs 89, reg 3(2)

D2433 D2432 D2434

Where the sum to be deducted falls under D2432 is not a multiple of 5 pence, it
should be rounded to the next higher such multiple (1).
1 Community Charges (Deductions from IS) (No. 2) Regs 90, reg 3(3);

Community Charges (Deductions from IS) (Scotland) Reg, 89, reg 3(3)

D2434 D2432

Deductions can be made from JSA or ESA under D2432 and D2433 only (1) if
1. the debtor is entitled to JSA or ESA throughout any benefit week and
2. no deductions are being made in respect of the debtor under any other
application.
1 Community Charges (Deductions from IS) (No. 2) Regs 90, reg 4(1);

Community Charges (Deductions from IS) (Scotland) Regs 89, reg 4(1)

D2435

No more than 3 third party deductions from UC may be in effect at any one time (1).
1 UC, PIP, JSA & ESA (C&P) Regs, Sch 6, para 3(1)(b)

D2436 Order of priority

There may not be enough benefit to enable deductions to be made for arrears of CC
and other debts. The order of priority in D2043 should then be followed (1).
1 Community Charges (Deductions from IS) (No. 2) Regs 90, reg 3(4);
Community Charges (Deductions from IS) (Scotland) Regs 89, reg 3(4)

D2437 More than one application

Only one application for deductions can be dealt with at any one time (1). More than
one application may be received for the same debtor, however any such multiple
applications should be referred back to the council. Further deductions can be made
only when deductions on any earlier application have ceased.
1 Community Charges (Deductions from IS) (No. 2) Regs 90, reg 4(1)(b);
Community Charges (Deductions from IS) (Scotland) Regs, 89, reg 4(1)(b)

[D2438-D2999]