A court judgement is going to force the Department for Work and Pensions (DWP) to dramatically change the way it deducts housing costs from Universal Credit payments. The High Court found the automatic approval of landlord requests to deduct money from Universal Credit payments without requiring officials to check with the claimants is “unfair” and “unlawful”
This significant ruling means that DWP will now be required to directly speak with claimants prior to removing chunks of their Universal Credit payments to give to landlords to cover alleged rent arrears.
The case against the DWP was heard in the courts on January 16, 2025, and was launched by Nathan Roberts, a Universal Credit claimant and rental tenant. In early 2024, he had over £500 docked from his Universal Credit payment at the request of his landlord.
At that point, Nathan – a law graduate and former police control room worker – was in a dispute with his landlord over an alleged failure to carry out repairs. Nathan was receiving £1,218 a month from Universal Credit, which included a standard allowance of £364.74, a £459.64 housing component and a £390.06 incapacity top-up for his disabilities.
The DWP was told by the landlord that he was owed two months of rent, meaning he was at risk of eviction if the arrears grew any more. In these circumstances, the DWP will take money out of someone’s monthly payments to pay the rent and repay the arrears to stop the debts from increasing.
The DWP also informed Nathan that he would no longer be receiving his housing component, and a further deduction of £44.74 would be taken on top to clear the rental arrears, reports the Mirror.
Nathan argued that the DWP had accepted the deduction without asking him if it was in his best interest and had failed to inform him of the deduction application in the first place. He also said that he did not have any arrears and that he was in a “genuine rent dispute” with the landlord over the habitability of the property.
However, the DWP’s actions were not a mistake – and were, in fact, a deliberate policy of the department. Currently, DWP decision makers are told by a computer programme to input certain information, and they are told at the end what the outcome should be. The claimants are not contacted before a decision is made, and most of the time, they are approved for both social and private landlords “automatically”.
Nathan’s legal representative of Garden Court North Chambers said the DWP could potentially be making “hundreds of thousands of deductions” from Universal Credit every year without checking with people first and was “clearly arbitrary and an abuse of process.”
The case argued: “Even if in theory the decision maker could unplug the computer and exercise their own discretion, the reality is that its instructions will be followed. The computer program is in effect a highly directive policy.”
The judge, Mr Justice Fordham, said it was unfair that tenants on Universal Credit who could be adversely affected by rent arrears deduction and rent diversion requests had no opportunity to make representations before the deductions were approved. He noted that the current process excluded and disempowered tenants.
Alongside this, Justice Fordham said there was a “real possibility” that DWP officials were being directed by the computer to approve deduction requests regardless of whether delaying or blocking the request was in the tenants’ best interests as they only had “one side of the story”.
Referring to Nathan’s case, the judge said that in a dispute over repairs, where withholding rent may be the “only leverage which a tenant has,” DWP decision-makers may “unwittingly and unknowingly” damage the tenant’s protections. Claimants can challenge the decision.
However, this requires a lengthy internal process, which means they would not be able to reverse the deductions for potentially several months if successful.
He added that there were “real-world impacts” on tenants, who, even if they successfully challenged the decision through lengthy internal DWP appeal processes, would not be able to reverse the deductions for months, during which they would be on reduced benefit.
Nathan appealed the DWP’s decisions but was rejected three by the department after three months of consideration. However, the decision was reversed a few days after the DWP was informed that legal action was being taken against it.
The recent ruling means that the DWP must now introduce tenant safeguards into the process, which could potentially protect “tens of thousands” of tenants each year. A Department for Work and Pensions spokesperson said: “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.”