Deductions

Legislation
Guidance
Case law

The rules about deductions from benefit and direct payment to third parties are set out in the Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Claims and Payments) Regulations 2013 (SI.No.380/2013), the Fines (Deductions from Income Support) Regulations 1992 (as amended), (SI.No.2182/1992), the Council Tax (Deductions from Income Support) Regulations 1993 (as amended) (SI.No.494/1993) and the Social Security (Overpayments and Recovery) Regulations 2013 (SI.No.384/2013).

NB: See below for equivalent legislation in Northern Ireland.

When can deductions be made	Regulation 60 of SI.No.380/2013	Sets out that deductions may be made and direct payments may be made to third parties on behalf of a claimant in accordance with the provisions of schedules 6 and 7.
Limitation of deductions	Schedule 6 paragraph 3 of SI.No.380/2013	Sets out the maximum number of deductions that can be made, and when consent is or isn’t required to make a deduction.
Maximum amount of deduction	Schedule 6 paragraph 4 of SI.No.380/2013	Sets out the maximum amount that can be deducted from a person’s award.
Priority of debts	Schedule 6 paragraph 5 of SI.No.380/2013	Sets out the priority order for deductions where there are limitations on the number of deductions that can be made.
Housing costs	Schedule 6 paragraphs 6 and 7 of SI.No.380/2013	Sets out when deductions can be made in respect of rent arrears and service charge debts, the amount that can be deducted, and the earnings level above which deductions may not commence or re-commence, or must cease.
Fuel costs and water charges	Schedule 6 paragraphs 8 and 9 of SI.No.380/2013	Sets out when deductions can be made in respect of debts or continuing costs of fuel costs and water charges, the amount that can be deducted, and the earnings level above which deductions may not commence or re- commence, or must cease.
Fines	Regulations 4 and 7 of SI.No.2182/1992	Sets out when deductions can be made in respect of fines and the amount that can be deducted.
Council tax arrears	Regulations 5 and 8 of SI.No.494/1993	Sets out when deductions can be made in respect of council tax arrears and the amount that can be deducted.
Advances, hardship payments and overpayments	Regulation 11 of SI.No.384/2013	Sets out the maximum amount that can be deducted in respect of advances, hardship payments and overpayments.

In Northern Ireland, SR.No.220/2016 makes provisions that are largely equivalent to those in Great Britain. In respect of deductions for fines, SR.No.98/2018 will make equivalent provision once updated to reflect the addition of universal credit to the list of means-tested benefits from which deductions may be made by SR.No.203/2021.

Further explanation of the legislation is set out in guidance. Please note, however, guidance is not binding and cannot override the legislation.

Advice for Decision Making	Chapter D2	Provides further guidance and examples on what deductions can be made and when.
Gov.uk	Universal Credit: debt and deductions that can be taken from payments	Sets out who claimants can talk to about debts/deductions, the priority order for taking deductions, the maximum amount that can be deducted, and when deductions can and can’t be made.
Gov.uk	Benefit overpayment recovery: staff guide	Guide for DWP staff which explains how overpayments of benefits administered by the DWP are recovered, including advances of benefits and hardship payments.
DWP guidance from parliament.uk	Deductions	Sets out the maximum rates of deductions that can be taken in total and in respect of individual deductions. Also provides guidance on what happens when sanctions, penalties or advances are being applied or deducted at the same time.
DWP guidance from parliament.uk	Deductions priority order	Sets out the priority order for making deductions, and which deductions are taken before the priority order is applied.

Case law provides further interpretation of the legislation and establishes legal precedent.

High Court	[2021] EWHC 608 (Admin)	High Court rules that DWP’s universal credit deductions policy’s use of a rigid formula in respect of court fines rather than the exercise of discretion as the legislation requires is unlawful. More information: Read the rightsnet summary

High Court

[2021] EWHC 608 (Admin)

High Court rules that DWP’s universal credit deductions policy’s use of a rigid formula in respect of court fines rather than the exercise of discretion as the legislation requires is unlawful.