Income support and bank charges

real1314

pipkin71 wrote: »

Have a look at post #4, where I suggested s187 Social Security Administration Act 1992 regarding income support and Child Benefit

Fair point, shouldn;t have skim read it.

However what that says is:

"187.—(1) Subject to the provision of this Act, every assignment of or charge on–
(a) benefit as defined in section 122 of the Contributions and Benefits Act;
[3(aa) a jobseeker’s allowance;]
(b) any income-related benefit; or
(c) child benefit,
and every agreement to assign or charge such benefit shall be void; and, on the bankruptcy
of a beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of
his creditors."

And what the bank will say is that they are not assigning or charging the benefit, they are assigning or charging the bank account. Once the money hits the account it ceases to be definable benefit and is just a balance. After all, if I have £50 in my account, then get £100 benefit paid in, I can't withdraw £50 and claim that this bit is the £50 I had and they can't touch the £100 benefit.
I believe that the DWP have an faq for their own staff about this which advises their staff to tell people that it's a matter between them and their bank.

galadriel

Hi, she may be better to open a Post Office Card Account to have her benefits paid into. This is a very basic account which does not have the option of direct debits/standing orders etc, it's just an account to have benefits paid into. To open one she would need a letter from the Income Support section to take to the post office with a couple of forms of ID. Another option is one of the basic bank accounts that the big banks offer. She can ask for benefit payments to be paid by a cheque cashable at the PO for a short period whilst she sorts the account out. She really needs to stop her payments going into the account as soon as possible.

pipkin71

real1314 wrote: »

Fair point, shouldn;t have skim read it.

However what that says is:


"187.

—(1) Subject to the provision of this Act, every assignment of or charge on–

(a) benefit as defined in section 122 of the Contributions and Benefits Act;
[3(aa) a jobseeker’s allowance;]
(b) any income-related benefit; or
(c) child benefit,
and every agreement to assign or charge such benefit shall be void; and, on the bankruptcy
of a beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of
his creditors."

And what the bank will say is that they are not assigning or charging the benefit, they are assigning or charging the bank account. Once the money hits the account it ceases to be definable benefit and is just a balance. After all, if I have £50 in my account, then get £100 benefit paid in, I can't withdraw £50 and claim that this bit is the £50 I had and they can't touch the £100 benefit.
I believe that the DWP have an faq for their own staff about this which advises their staff to tell people that it's a matter between them and their bank.

Thanks real.

I had heard something before about the banks not being able to take benefit money, so I looked at a few sites, which all seem to suggest that they can't. I see your point though.

I think the advice about setting up a new account at another branch is good advice, and then dealing with charges, but also ensuring that charges aren't applied on the new account.

I honestly don't know what to make of whether or not a bank can charge on benefit payments, so perhaps the OP needs to read up on the info out there, as well as the info on Right to Appropriation.

BW Pipkin xxxx

krisskross

I do wish people would not perpetuate the myth that banks cannot take charges from income derived from state benefits. The section of the act quoted is specifically to stop what used to happen when benefit books were taken as security for loans from back street lenders. It makes no sense at all to say charges cannot be made on benefit income when most of the country claims benefits of one sort or another.

The OP's daughter could try asking the Financial Ombudsman to intervene claiming hardship.