DWP refusal to reduce UC deductions for rent arrears

Use this template if all the following apply

• Your client receives universal credit (UC)
• Your client has a third-party deduction for rent arrears at 15% of their standard allowance
• Your client's deduction is causing financial hardship
• Your client asked for the rate of deduction to be reduced and this has been refused
• Your client has provided all information and evidence asked for by the DWP to support their request

This letter assumes that (so can be changed)

• The only deduction from your client’s UC is for rent arrears
• They do not have a combination of deductions totalling 15%

When not to use

Do not use this letter if:

• Your client has not provided all information and evidence asked for by the DWP to support their request, eg a financial statement or evidence of expenditure
• Your client has not asked for the deduction to be reduced

The main legal arguments in this template are:

1. Sch 6 para 7 (5) of the Universal Credit, PIP, JSA and ESA (Claims and Payments) Regulations 2013 limits the deductions in respect of rent arrears (except where a claimant earns above a certain amount) to between 10% and 20% of a claimant's standard allowance.
2. Current policy, as confirmed by DWP operational guidance 'Deductions' (V19), is to limit the maximum to 15% of a claimant's standard allowance, which may be reduced to 10%.
3. The DWP guidance goes on to detail when the deduction for rent arrears should be reduced from the maximum 15% as either:
   1. where another deduction is already in place, or 
   2. in cases of financial hardship where the deduction for rent arrears is being made at more than 10% of the standard allowance. 
4. 15% of the claimant's standard allowance is being deducted in respect of their rent arrears.
5. The DWP appears to have limited the criteria it has used to reach its decision not to reduce the level of deductions from the claimant's UC to 'whether the maximum level of permissible deductions has been reached' and taken no account of the financial hardship the claimant is experiencing, and in doing so has unlawfully fettered the discretion available under the legislation and guidance.
6. The DWP further appears not to have considered whether the claimant's circumstances amount to a level of 'financial hardship' which would justify a reduction in the rate of the deduction from their UC and in doing so, has failed to take both the relevant facts of the claimant's circumstances and its guidance 'Deductions' into account, both of which render the refusal to exercise its discretion to reduce the current maximum deduction rate for rent arrears of 15% unlawful.

Information about your client

• name
• address
• national insurance number (NINO)
• date of birth

Background facts

Such as:

• household, housing, children, disability, etc
• amount of rent arrears being repaid
• amount of money your client has left to live on
• details of your client's essential expenditure, and of their financial hardship

Information relating to the decision

• date of the notification to your client that 15% would be deducted
• date and method of your client’s request that it be reduced and details of the evidence provided by your client
• date of the DWP’s refusal to refuse the deduction and the reason provided, with a quote from your client’s journal if possible

We've created this guide to help you successfully use our judicial review pre-action letter templates: Guide to using CPAG's judicial review pre-action letter templates

Once you've finished your letter, please email it to us at: [email protected] before you send it to the lawyers acting for DWP/HMRC/your local authority. We'll try to reply as quickly as possible and will do so within 7 days.