Priority of debts
The debts covered by the scheme are rated in a priority order. This reflects the degree of risk to the individual or their family by the enforcement action that may result from non-payment.
For UC, an order of priority applies if the client’s UC is ‘insufficient’ to meet all the deductions. The award of UC is ‘insufficient’ if the total amount of deductions would be more than 40 per cent of the standard allowance that applies to them. Deductions are paid in the following order of priority.
Priority order of debts 1Sch 6 para 2(2) UC,PIP,JSA&ESA(C&P) Regs 1. Housing costs
2. Rent arrears (and related charges), if the amount of the deduction is 10 per cent of your standard allowance
3. Fuel
4. Council tax arrears
5. Fines
6. Water charges
7. Repayment of social fund payments
8. Recovery of hardship payments
9. Penalties instead of prosecution for benefit offences
10. Recovery of overpayments of benefits or tax credits caused by fraud
11. Civil penalties
12. Recovery of overpayments of benefits or tax credits not caused by fraud
13. Repayment of integration loans
14. Repayment of eligible loans
15. Rent arrears (and related charges), if the amount of the deduction is more than 10 per cent of your standard allowance
For IS, income-based JSA, income-related ESA and PC, if the client has more debts or current charges than can be met from their benefit, deductions are made in a similar order to those for UC (the first three in the list are the same as for UC).2Sch 9 para 2(2) SS(C&P) Regs Deductions for child support are always payable.
If there are both gas and electricity arrears, the DWP chooses which one to pay first, depending on the client’s circumstances.
Advisers should seek advice from a benefits specialist if they are unsure.