Benefit claimant wins High Court challenge over DWP policy approach to “Third Party Deductions”

The High Court has declared unlawful the Department for Work & Pensions’ written guidance for officials on ‘third party deductions’.

This concerns decisions that parts of a claimant’s benefits should be deducted to make direct payments to utility companies.

In Timson, R (On the Application Of) v Secretary 0f State for Work and Pensions [2022] EWHC 2392 (Admin) Mr Justice Cavanagh ruled in a case brought by claimant Helen Timson that the written guidance was unlawful because, “by implication and omission, it has the effect that, read as a whole, the guidance presents a misleading picture of the true legal position to decision-makers, in that it does not make clear that claimants should be offered the opportunity to make representations and/or provide relevant information to the decision-maker before the third party deduction decision is taken”.

He dismissed though a claim that the guidance infringed Ms Timson’s rights under the ECHR.

Law firm Bindmans, which acted for Ms Timson, said the ruling meant the guidance must be significantly altered to make it clear to DWP decision-makers that claimants should be given the opportunity to make representations and provide information before a decision is made about deductions.

It said the previous guidance did not stipulate this and so claimants could not easily dispute whether the money was owed, state what their financial circumstances were or suggest there might be other ways to pay the debt.

Cavanagh J said: “In my judgment, a failure on the part of the decision-maker to give the claimant the opportunity to make representations and provide information would be a breach of the obligation of fairness.”

He said there was a legal obligation to seek representations in every case, because otherwise a decision maker could not know whether there were any relevant representations or information. 

Bindmans said Ms Timson had had deductions made from her disability-related benefit over many years, in some cases leaving her unable to pay rent or being taken for money not owed.

Emma Varley, the Bindmans solicitor who represented Ms Timson, said: “Our client has demonstrated incredible bravery in challenging this scheme. The judgment will mean that Ms Timson and other benefit claimants will be afforded the crucial opportunity to make representations to the DWP before a decision about how their money is spent is made on their behalf."

Ms Timson said the deduction scheme remained “inherently flawed", as decision-makers retained the power to determine how claimants’ money was spent.

She said the legislation on deductions should be changed from referring to them when in the ‘interests’ of the benefit claimant to ‘if the benefit claimant consents’.

Mark Smulian