A woman with disabilitiescapped will challenge the Department of Work and Pensions in court over what it calls its "immoral" policy of allowing homeowners and utility companies to automatically make deductions from monthly benefit payments without the consent of the claimant.
Helen Timson, 50, of Leicester, said the third party deduction scheme, which allows up to 25% of monthly benefits means-tested people to be diverted at source to pay arrears, was illegal and could leave many people without enough money to buy food and pay rent.
At least 200,000 UK households are facing deductions from their benefits as a result of the deals made by the companies in the UK. water, gas and electricity with the DWP so that customer arrearsare paid automatically - and there are fears that rising Wi power prices will lead to more families coming under the regime.
In current practice, the DWP does not seek the consent of the claimant for these deductions if they amount to less than a 25% threshold. She also does not carry out means tests, nor does she attempt to agree realistic payment plans with creditors.
Timson said she had twice had deductions made without his consent. This happened once when his water supplier tried to charge him £ 2,200 because of a faulty meter; and again when an energy company deducted £ 80 per month, even though it was not a customer and had no arrears.
Due to the deductions, she was pushed to the edge of poverty and unable to pay her rent. On one occasion she hashad to cancel an appointment for an NHS cancer scanner because she didn 't have enough money to pay for a cab.
" Payment of arrears should not leave benefits. claimants destitute and unable to pay for basic necessities ties, "said Timson, who currently collects disability unemployment benefit. " There must be a way viable for third parties to arrange a realistic repayment schedule with the consent of the debtor, rather than allowing utilities and homeowners to help themselves with a quarter of people's benefits - including for errors where no money is owed.
She said: "This is immoral and it is indefensible that utility companies are still diving more people in poverty, leaving them without enough money for rent or food, while earningnt interest on money paid to them in error. "
The case should be heard in the coming months.
A spokesperson for DWP said, “Safeguards are in place to ensure that deductions are manageable for clients and they are encouraged to contact DWP if they believe a deduction from their service should not be made. "