High Court rules DWP’s Universal Credit deduction scheme unlawful

The High Court has declared the Department for Work and Pensions’ (DWP) method of deducting rent payments from Universal Credit recipients unlawful.

In the case of Roberts v The Secretary of State for Work and Pensions, the court ruled that the DWP’s failure to consult individuals before authorising deductions from their benefits is unfair.

Following a landlord application, the DWP decided to make deductions from Mr Roberts’ Universal Credit in March 2024, for ongoing rent payments and towards rent arrears.

However, Mr Roberts challenged the DWP’s decision to deduct rent payments and arrears from his UC.

While the DWP later acknowledged the deductions were made in error and refunded Mr Roberts, he proceeded with his legal challenge, arguing against the policy that allowed these deductions.

Unfair to make deductions

Mr Roberts’ solicitor, Emma Varley from Bindmans, said: “This is an important judgment which confirms what Mr Roberts felt sure of from the outset: that it was unfair of the DWP to make deductions from his benefit without first asking him what he thought about them.

“This judgment should lead to fairer, and better, decision-making by the DWP, which should positively impact the many thousands of people that receive Universal Credit benefit that are at risk of experiencing these types of deductions.”

DWP’s deduction process

Following a judicial review, Judge Fordham concluded that the DWP’s deduction process is inherently unfair.

The court highlighted several factors contributing to the unfairness of the DWP’s scheme, including the lack of claimant input on crucial matters like rent disputes, payment history and potential eviction risks.

It also said: “The statutory scheme, the framework of policy guidance and the SSWP’s own practices all reflect a clear recognition that the decisions to make and implement a Diversionary-MPTL and a Recoupment-TPD are designed to protect the interests of the UC-claimant. Not the landlord. Yet, when a landlord makes a request, it is the UC-claimant who is then unnotified and unheard until the decision is made and implemented. Except under the Post-2017 Practice. This is an exclusion, and a disempowerment, of the very person sought to be protected. It is inconsistent with the ethical value, where the person’s rights and interests are supposed to be central.”

Interests of the UC-claimant

The judgement continues: “The decision-making process allows information to be elicited unilaterally from someone – a landlord – with an interest which may not align with the interests of the UC-claimant; giving one side of a story; the protection of whose interests are not the rationale of the payment they will receive. They are likely to be an organisation in an unequal relationship with the UC-claimant. It is quite right to hear from them; but it is unfair to hear exclusively from them. Indeed, in the context of a disrepair dispute, where withholding rent may be the only leverage which a tenant has, SSWP may very well be unwittingly and unknowingly cutting across a protection.”

Change in the deduction procedures

This ruling now means there will be a change in the DWP’s deduction procedures.

All Universal Credit claimants, including those in social housing, must now have the opportunity to provide input before any deductions are made from their benefits.

This judgment follows a similar Court of Appeal ruling that found the DWP’s ‘Third Party Deductions’ policy for Employment and Support Allowance unlawful for its failure to consult claimants.

A Department for Work and Pensions spokesperson told The Guardian: “We are now carefully considering this judgment.

“Millions of people rely on our welfare system every year and it is vital that it can be accessed by all who need it.”