Third-party deductions
A third-party deduction scheme is used when a client has arrears and other methods to recover the debt have been tried. A threat of enforcement action must have been used before a third-party deduction can be applied for (unlike Water Direct which can be applied for without the threat of enforcement action). A fixed amount is deducted from the client’s benefits to clear the arrears.
1Sch 9 SS(C&P) Regs Third-party deductions can be made from UC, IS, JSA, ESA or PC. The amount is deducted from the client’s benefit and paid directly to the creditor until the debt is cleared. Where there is more than one debt, a maximum of three deductions can be taken at any one time inclusive of council tax arrears.