UK energy suppliers can now request new or increases to existing deductions for Fuel Direct ongoing consumption payments after an announcement by the Department for Work and Pensions (DWP). However, requests must have the claimant’s consent first.
In addition, for new requests, suppliers must also get a claimant’s consent before the request can be sent to the DWP. However, there are some rules to consider. Daily Record reported that the DWP said in exceptional circumstances, when an energy supplier has exhausted all methods to contact a claimant, who has an existing arrangement, they can notify DWP. DWP will attempt to contact the claimant and advise them to contact the energy supplier. The process reportedly starts from this month.
If you owe money such as a court fine, rent, Council Tax or energy payments, money might be taken directly out of your benefits payments to pay the debt. This is sometimes called ‘third party deductions’ or, for gas and electricity payments, Fuel Direct.
The benefits that can be used are:
- Universal Credit
- income-based Jobseeker’s Allowance (JSA)
- income-related Employment and Support Allowance (ESA)
- Income Support
- Pension Credit
Explained: How deductions are made to pay your debts
Organisations you owe money to can ask for deductions to be made from your benefits to pay the debt. The office that pays your benefit will only agree to do this if the organisation has tried other ways of getting the money from you. You will be told how much will be deducted by letter or in your Universal Credit journal.
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How much will be deducted?
A fixed amount is deducted from your benefits until you’ve paid off the debt you owe. Money can be deducted to pay off up to three debts at once.
Deduction rates:
- Universal Credit - five percent will be deducted
- Rent - between 10 and 20% will be deducted
- If you receive other benefits - £3.85 a week will be deducted for each debt
DWP said that if you want to pay more than the fixed rate towards your debts, you must arrange this with the organisation you owe money to.
Paying your ongoing bills
While paying off debt to your gas, electricity or water supplier, you can have extra money deducted from your benefits to pay your ongoing bills.
Paying gas and electricity bills (Fuel Direct)
Contact your supplier to set up deductions for your ongoing bills. They will need your consent to request this for you - you can give consent on the phone, it does not need to be in writing.
Agree an amount with them that covers the cost of the energy you use.
You can stop deductions for ongoing bills at any time. Contact the office that pays your benefit to request this. If you choose to stop making gas and electricity payments, contact your energy supplier to arrange a different way to pay.
If you want to change the amount you pay, contact your supplier.
If you owe money but cannot afford more deductions to your benefits, your supplier can tell you what help is available for people on low incomes. They may be able to arrange a different way for you to pay.
When you have repaid your debt
If you get Universal Credit, deductions for ongoing bills will stop once you’ve repaid your debt. If you get other benefits, you can ask to continue paying your bills this way.
What if you need to discuss your deductions
If you need to discuss the deductions, you should contact the office that deals with your benefit.
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