Has anyone ever looked into this?

sammieking

Has anyone ever looked into this?
I’ve been reading up on protected income and Section 187 of the Social Security Administration Act 1992, and I’ve realised something odd.

Disability‑related benefits like:

• ESA Support Group
• PIP
• DLA
• IIDB
• Severe Disablement Benefit

…are legally protected and not supposed to be used for debt repayment.
They’re ring‑fenced by statute.

But when you look at how Debt Management Plans (DMPs) are actually set up, these benefits often get added straight into the affordability calculation as normal income.

That means people on disability benefits may be paying into DMPs using money that the law says shouldn’t be touched.

I’ve written up what I found here: https://dmpscams.com/protected-income-what-dmp-debt-providers-hides-from-clients

What I’m wondering is:

Has anyone ever had a DMP where their disability benefits were included in the income sheet?
Did your provider ever mention Section 187?
Did any creditor ever raise it?

It’s strange how this topic never appears on Martin Lewis’ consumer site or any mainstream debt‑advice pages. You’d think something this important would be front‑and‑centre.

Genuinely interested in people’s experiences — especially anyone who’s been on a DMP while receiving protected benefits.

marcia_

https://forums.moneysavingexpert.com/discussion/6675896/has-anyone-ever-looked-into-this

surely its protected from government debt not private debt

sammieking

hi Marcia,

Not quite — Section 187 doesn’t say “government debt”. It says protected DWP benefits cannot be assigned, charged, or taken in execution.

That wording isn’t limited to government creditors. It’s a blanket protection that prevents any third party from treating those benefits as money available for debt repayment.

That’s why it’s interesting that DMP providers routinely include disability benefits in affordability calculations. If the law ring‑fences them, it raises questions about whether they should be used in private debt plans at all.

I’m just curious whether anyone here has ever had a DMP where their disability benefits were excluded because of Section 187 — or whether providers ever mentioned it.

Just to clarify something I said above a few mins ago; Section 187 itself doesn’t use the term “DWP”, but the benefits it covers are DWP‑administered benefits. The wording in the Act is that these benefits cannot be assigned, charged, or taken in execution.

That protection isn’t limited to government debts. It’s a general prohibition on treating those benefits as money available for debt repayment by any third party.

That’s why it’s interesting that DMP providers routinely include disability benefits in affordability calculations. If the law ring‑fences them, it raises questions about whether they should be used in private debt plans at all.

This is the link that was on DMPSCAMS.COM -

Social Security Administration Act 1992

Jude57

https://forums.moneysavingexpert.com/discussion/comment/82066032#Comment_82066032

My understanding of the legislation, and I'm a former Council Tax recovery officer AND, perhaps uniquely, a former debt advisor, is that the meaning of S187 is that those benefits cannot be directly attached to recoup a debt. Council Tax debts can be recovered by attachment of earnings and by attachment of certain benefits but some benefits, those stipulated in the legislation you quote, are exempt from such attachment. Consumer debt can also, subject to a County Court judgement, be recovered by attachment of earnings and some benefits and again, it's my understanding that the benefits excluded from that are those stipulated in S187. That's what 'assigned, charged or taken in execution' means, that they cannot be formally, legally attached. It's not a 'blanket protection', rather, government recognises that those entitled to those specific benefits may have specific needs to be met by those benefits and they are ringfenced for those needs.

A DMP is not a formal, legal arrangement binding on either side. It's an informal, non-binding agreement with no legal standing and no legal obligation on either side, though most creditors will abide by the 'gentleman's agreement' not to pursue formal recovery options while the debtor abides by the DMP by regular payments. So all benefit payments are accounted for as income when creating a budget for a debtor but if those benefits are used for, say, the specific additional requirements of a disabled person, they are also accounted for in the expenditure part of the budget, effectively reducing the amount available for debt repayments. It could be specific additional dietary, laundry, continence or other things essential for the individual. If the debtor's entire income comprises benefits listed in S187, their entire budget could be comprised of expenditure meeting their specific needs and, personally, I'd be looking at other options for them rather than a DMP, unless their situation was likely to improve in the medium term, such as recovery from an illness or accident and they expected to return to work. Otherwise, in a case where no change was likely and income comprises only the benefits specified, I'd be recommending a different approach than a DMP.

sammieking

Thanks Jude — that makes sense in the context of formal attachment.
I wasn’t thinking about attachment of earnings or benefits though. I was thinking specifically about DMP affordability assessments.

If disability benefits are ring‑fenced for the claimant’s needs, and Section 187 prevents them being treated as money available for debt execution, I’m just curious how that fits with DMP providers routinely including those same benefits as disposable income in their budgeting tools.

I’m not saying they’re wrong — I’m just wondering whether any provider ever excludes disability benefits entirely because of Section 187, or whether that’s never been considered in the DMP world.

Has anyone ever seen a DMP where disability benefits weren’t counted as income at all?

Brie

As someone who compiled quite a number of income and expenditure (or SOAs) to submit to creditors all income and benefits were included. But the additional costs associated with a disability were also included which meant that the PIP or whatever was essentially zeroed out.

sammieking

Thanks Brie, that’s really helpful. I think that’s where the interesting bit sits for me.

Including disability benefits as income and then zeroing them out with the matching disability‑related costs makes perfect sense in day‑to‑day DMP practice. It’s exactly how most advisers have always handled it.

I was just wondering about the wider picture though, because Section 187 SSA 1992 ring‑fences certain benefits for the claimant’s essential needs, and in Scotland those protections are also reflected in how sheriffs deal with arrestments and attachments. Then on top of that you’ve got the FCA’s Consumer Duty and vulnerability guidance, which also emphasise that some income shouldn’t be treated as disposable.

So I’m curious whether any DMP provider ever goes a step further and excludes disability benefits entirely from the income side of the SOA because of those protections, rather than including them and then zeroing them out. I’ve never seen it done, but I wasn’t sure if anyone else had.

Has anyone ever had a DMP where disability‑related benefits weren’t counted as income at all?

sammieking

Thanks everyone, and especially those who’ve taken the time to read the primary legislation link provided above and here as its UK wide law of the land.

Social Security Administration Act 1992

Given what Section 187 of the Social Security Administration Act 1992 actually says, I’d be really interested to hear from anyone who has ever compiled SOAs (past or present) about what they now think should happen in DMP applications.

Not in terms of “how we’ve always done it,” but in terms of what the legislation itself requires.

Because if protected benefits legally cannot be assigned, used for debt recovery, or treated as available income, then it raises a genuine question about how DMPs should be built going forward, especially for vulnerable clients or anyone whose income includes protected elements.

I’m not trying to challenge anyone’s experience or training. I’m just asking, now that we’ve all looked at the primary legislation directly:

What do you think the correct approach should be for DMPs when protected income is involved?

marcia_

this is verging on political discussion which is not allowed on the forum

sammieking

Hello Marcia;

Just to clarify — this thread is about Section 187 SSA 1992 and how protected income is treated in DMP affordability assessments.

It’s consumer‑law and debt‑advice practice, not political discussion.

kaMelo

Hmm, it's borderline political discussion.

I've always understood the advice to be as @Brie explained, include disability benefits as income, as it is income. But have an equal amount as disability related expenditure, cancelling out the disability benefits income.

I've never seen anyone who posted on here who did just that and had a problem with it.