A High Court ruling has exposed that £480 million was unlawfully deducted from tenants’ Universal Credit (UC), sparking widespread concern. Since 2017, the Department for Work and Pensions (DWP) has allowed landlords to request deductions from tenants’ UC to cover rent arrears, a practice the court recently branded “procedurally unfair” and “unlawful.”
A Freedom of Information (FOI) request uncovered 10.3 million deductions totaling £479 million for rent and service charge arrears. The DWP responded by saying it is “carefully considering” the ruling while emphasizing its dedication to “protecting claimants from debt.”
Emma Varley from Bindmans, the law firm behind the case, highlighted the shift this forces on the DWP: “The court’s decision means the DWP must now consult UC claimants about proposed deductions beforehand, marking a big change in how these are handled.” A government insider told The i Paper, “This mess began under the Conservatives and went unchecked. Labour’s committed to fixing it.”
Francesca Albanese from Crisis praised the ruling, noting, “Decisions like these deductions, made without warning, pile stress onto people already struggling. Beyond this fix, the government needs to tackle why tenants with arrears are rejected for housing—our welfare system’s inadequacy leaves people unable to cover rent and basics, risking homelessness.”
A DWP spokesperson added, “We’re reviewing the judgment and stand by our goal to keep claimants out of debt. Starting April, we’re cutting the maximum UC deduction rate—including for rent arrears—from 25% to 15% with our Fair Repayment Rate.”
FAQ’s
What did the High Court rule about Universal Credit deductions?
The High Court ruled that the Department for Work and Pensions’ (DWP) practice of deducting Universal Credit (UC) for rent arrears without tenant consent is ‘procedurally unfair’ and ‘unlawful,’ affecting deductions made since 2017.
How much money was deducted?
According to The i Paper’s Freedom of Information request, 10.3 million deductions totaling £479 million were taken from UC for rent and service charge arrears, a process now deemed illegal.
What does this mean for UC claimants now?
The DWP must now consult claimants before making deductions, a significant shift in procedure, as stressed by Emma Varley of Bindmans, the firm that won the case.
How is the DWP responding?
The DWP is ‘carefully considering’ the ruling and remains focused on preventing claimant debt. From April, they’re lowering the maximum UC deduction rate from 25% to 15% under the Fair Repayment Rate.
Who’s to blame, and what’s next?
A government source blamed the prior Conservative administration for the issue, saying Labour aims to fix it. No clear plan for repaying the £479 million has been outlined yet.
What do charities say about this?
Francesca Albanese from Crisis welcomed the ruling, noting unannounced deductions worsen hardship. She urged broader welfare reforms to ensure people can afford rent and essentials, reducing homelessness risks.
do we get it back they take so much money of my Areas