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Controversial Automatic Deductions from Universal Credit to Be Scrapped
Ministers are set to eliminate a contentious “computer says yes” program that enabled automated deductions from tenants’ universal credit benefits without their approval, at the behest of landlords.
A recent court ruling deemed the “click-screen” process used by the Department for Work and Pensions (DWP) to handle numerous deduction requests each year as unlawful.
This decision followed a legal challenge by tenant Nathan Roberts, who argued that the DWP’s action constituted an “abuse of process.” Specifically, Roberts raised concerns over a £500 deduction from his benefits that occurred without his prior consent, while he was engaged in a dispute with his landlord regarding essential repairs.
On Monday evening, Work and Pensions Secretary Liz Kendall announced that the DWP would refrain from appealing the ruling and is exploring alternative measures to ensure tenants have a greater voice in discussions about benefit deductions.
Kendall stated, “I am determined to right the wrongs that have persisted in the benefits system for too long. The automatic approval of landlords’ requests for tenants’ benefits to be deducted is one of these.”
This internal review of landlord deductions will be part of a broader reform aimed at restructuring the design and processes of universal credit, as the government addresses challenges it describes as stemming from a “broken welfare system.”
Stephen Timms, the minister overseeing universal credit, emphasized the need for immediate reform within the benefit system. “Whether it’s addressing the significant debt accumulation faced by carer’s allowance recipients through no fault of their own or halting the automatic deduction of benefits at the discretion of landlords, we are committed to comprehensive improvements,” he stated.
The judge’s ruling hinged on Roberts’s assertion that the DWP acted unlawfully by directing the £460 rental component of his benefits, along with a £44 deduction for supposed rent arrears, directly to his landlord, the Guinness Partnership, without prior consultation.
The ruling underscored the unfairness of allowing a tenant who could be adversely affected by such financial actions to be deprived of the opportunity to formally express their views beforehand.
Emma Varley of Bindmans solicitors, who represented Roberts in court, remarked on the significance of the DWP’s engagement following the outcome of the case. She noted, “This is a positive – albeit belated – step. The exact nature of the changes to be implemented is still to be determined, but the DWP’s need for improved decision-making can no longer be overlooked.”
The DWP’s review is also expected to address similar automated deductions conducted on behalf of utility companies regarding overdue water and electricity payments, which have occurred without the consent of the claimants.
An earlier ruling, which took place 18 months ago, established that the DWP violated the obligation of fairness by failing to consult with claimants prior to deducting as much as 25% of their benefits for unpaid bills.
In related developments, Labour’s proposal for a fair repayment rate, which would limit the deduction amounts from benefit payments for repaying short-term loans and debts, is anticipated to take effect in April. This change is predicted to enhance the financial situation of 1 million of the UK’s most disadvantaged households by approximately £420 annually.
Source
www.theguardian.com