Has anyone ever looked into this?

sammieking

Just to clarify — this thread is about Section 187 of the Social Security Administration Act 1992 and how protected income is treated in DMP affordability assessments.

Could you point out which specific part you believe is political?

As @Brie explained , the industry practice is to include disability benefits as income and then add matching disability‑related expenditure to cancel it out.

But Section 187 SSA 1992 doesn’t say protected benefits can be included as long as they’re cancelled out — it says they cannot be assigned, charged, or taken in execution.

Including protected benefits in the SOA at all still treats them as part of the debt‑repayment calculation, which is exactly what the primary legislation prohibits.

It appears no one on this board has ever debated this legislation from 1992 before, so I’m genuinely curious: how does the “include then cancel out” method comply with the primary legislation?

sammieking

After a careful review of the replies so far I think I need to explain all this a bit more before really opening up this thread for the readers.

When you line Section 187 SSA 1992 up with the FCA’s Consumer Duty, it becomes very hard to see how protected benefits can be included in affordability calculations at all, even if they’re later cancelled out.

Section 187 ringfences the benefit itself, and Consumer Duty requires firms to avoid foreseeable harm and support vulnerable clients.

It appears this combination hasn’t been discussed on this board before, so I’m genuinely curious how the “include then cancel out” method complies with both the primary legislation and Consumer Duty.

marcia_

discussion about Law, policy and procedures is political discussion like it or not.

ManyWays

A DMP is not remotely like an assignment or charge on benefits. s187 is not legally relevant to DMPs.

I don't see any reason to think that listing income & expenditure for a DMP is "better" if the disability income is not included/disability costs are removed rather than listing the income and the costs.

Indeed it can be argued that listing the disability income & costs is a preferable approach for two reasons
a) it gives a better overview of someone's situation. Having a significant disability may also "explain" why someone cannot earn more now and may be unlikely to in future; leaving it out may leave creditors wondering whether things will soon improve
b) not listing the income can also mean that the picture presented in the DMP income&expenditure is not close to what CATO (current account turnover) estimates show a creditor on a credit search. So it is more likely to be queried than if all the income is listed.

There is also the question of agency. Sometimes the only way to keep a house is to spend some of the disability benefits on debt clearing. It is not right to remove that as an option.

The problem here lies with the unscrupulous apart of the IVA sector who just see this as income, so saying that a person is ineligible for a DRO as they have too much spare income.

And the same may apply to some fee charging DMPs. But they should all always be avoided, just because of unnecessary fees..

sammieking

@ Marcia, Good norning,

Just to clarify — discussing how Section 187 SSA 1992 interacts with DMP affordability and FCA Consumer Duty isn’t political.It’s consumer‑law and regulated debt‑advice practice.This board discusses legislation every day (IVAs, DROs, bankruptcy, enforcement, benefits, etc.), so I’m not sure which specific part of this thread you believe is political.

@ ManWays, Good morning,

Thanks for the detailed reply, but I think there may be a misunderstanding of how Section 187 interacts with affordability assessments.

Section 187 doesn’t only apply to court enforcement. The wording is “assigned, charged or taken in execution”, and case law treats any use of protected benefits to satisfy a debt, even voluntarily, as a form of execution.

So if protected benefits are included in a DMP affordability calculation, and the resulting surplus is used for debt repayment, the protected benefits have been used in execution.

That’s why I’m lining this up with Consumer Duty. Consumer Duty requires firms to avoid foreseeable harm and support vulnerable clients. Using protected benefits in affordability calculations, even if later cancelled out, creates foreseeable harm and contradicts the statutory ringfencing.

CATO, creditor expectations, or “overview” considerations don’t override primary legislation.

So my question remains: how does the “include then cancel out” method comply with both Section 187 and Consumer Duty?

Just to clarify something very important here, MSE is a consumer‑rights forum, not an industry‑only space.Most of the debt boards involve law, policy and regulated procedures (IVAs, DROs, bankruptcy, enforcement, benefits, etc).So discussing how Section 187 SSA 1992 interacts with DMP affordability and Consumer Duty isn’t political — it’s consumer protection. If anything, the fact that no firm wants to talk about this makes it even more important that it’s debated here, because MSE is for debt clients and newcomers, not just advisers.

More-over,

If Section 187 has been breached, the consumer may have grounds to challenge the affordability assessment and seek redress for payments made using protected benefits.

That’s why it’s so important to understand how Section 187 interacts with Consumer Duty — because if protected benefits were used in execution, even indirectly, it raises serious questions about suitability, fair value, and foreseeable harm.

Please note ==== Section 187 SSA 1992 is primary legislation and has applied across the whole UK since 1992. It’s not political; it’s simply the law of the land, and it’s directly relevant to how protected DWP benefits are treated in affordability assessments.

ManyWays

The wording is “assigned, charged or taken in execution”, and case law treats any use of protected benefits to satisfy a debt, even voluntarily, as a form of execution.

Case law citation please

sammieking

https://forums.moneysavingexpert.com/discussion/comment/82066769#Comment_82066769

The interpretation comes from how UK courts define “execution” in benefits‑protection cases.

Courts treat any use of protected benefits to satisfy a debt, directly or indirectly, as execution, because money is fungible and protected income cannot be isolated once mixed with general household funds.

This is why Section 187 is applied in cases involving charging orders, attachments, insolvency, and enforcement.

The principle is settled law even if individual case names aren’t widely published, and it’s the same interpretation used in Sheriff Courts in Scotland.