Tens of thousands of vulnerable Britons have seen their Universal Credit (UC) payments docked under a scheme that has now been deemed “unlawful and unfair” by the High Court, sparking outrage and demands for immediate reform.
Since 2017, the Department for Work and Pensions (DWP) has allowed social landlords to request direct deductions from tenants’ UC payments if they fell into rent arrears.
The idea was to prevent evictions, but crucially, tenants were never consulted before these deductions were made.
Following a landmark legal challenge, the High Court ruled last month that the scheme was “procedurally unfair” – a damning verdict that has left the government scrambling to address the fallout.
Over 10.3 million deductions have been made through this process since April 2018, stripping claimants of nearly £480 million in total.
One of those affected is Nathan Roberts, a UC claimant who saw £500 deducted from his benefits to cover disputed rent arrears. He had been in an ongoing battle with his landlord over property repairs, yet his money was taken without his input.
Legal experts say this ruling forces the DWP to change its approach. Emma Varley, associate at legal firm Bindmans, told The I Paper: “The DWP must now consult UC claimants before making these deductions. This is a significant change to how they will have to process cases in the future.”
Despite the ruling, the DWP has refused to confirm whether those affected will receive compensation, leaving many wondering if justice will truly be served.
The ruling adds fuel to an already heated debate on welfare policies. A government insider admitted: “This wrongly happened under the last Conservative government and was never addressed. This Labour Government is going to do things differently.”
Labour is already under pressure over its own benefit policies, with planned welfare spending cuts reportedly rising to £5 billion. DWP Secretary Liz Kendall is said to be pushing for these savings to be redirected into back-to-work schemes, but critics argue the move is yet another example of punishing the most vulnerable.
Housing charities and anti-poverty campaigners have slammed the deductions as “cruel.” Francesca Albanese of the homelessness charity Crisis said: “Decisions affecting people’s benefits without prior notice create unnecessary hardship. The government must ensure people aren’t penalised simply for struggling to make ends meet.”
Shelter’s chief executive, Polly Neate, warned that the crisis in housing benefits was pushing people to the brink: “Renters who rely on UC to help cover rent face huge shortfalls, forcing them to skip meals or cut back on essentials. The government must unfreeze housing benefits immediately and invest in social housing.”
Tougher crackdown on welfare claimants
While the DWP faces legal challenges over UC deductions, ministers are also ramping up efforts to crack down on benefit fraud. The government has unveiled plans for “the biggest fraud crackdown in a generation,” aiming to claw back £1.5bn over the next five years.
A controversial new proposal would require banks to share limited financial data with the DWP, targeting claimants with over £16,000 in savings.
Privacy groups have blasted the idea as “unprecedented financial intrusion.” Jasleen Chaggar of Big Brother Watch warned: “This would give DWP civil servants constant access to the bank statements of welfare recipients, exposing their private financial lives.”
Labour’s Renters’ Rights Bill – A solution?
With housing at the heart of the problem, Labour is pushing forward its Renters’ Rights Bill, which would expand protections for private renters. It proposes increasing the threshold for eviction from two months’ arrears to three and raising notice periods from two to four weeks. The bill also aims to outlaw discrimination against tenants on benefits.
What happens next?
As the government considers its next move, claimants are left in limbo. Will those affected be compensated? Will landlords continue to pressure tenants with unfair deductions? One thing is clear—this ruling has exposed a deeply flawed system that, unless properly addressed, could leave even more Britons struggling to keep a roof over their heads.
