Can banks take benefits for overdraft repayments?

GBbusines · 16 April 2019 at 10:53AM

I seen this law;

"Social Security Administration Act 1992
Miscellaneous
Certain benefit to be inalienable **

187- Subject to the provisions of this Act, every assignment of, or charge on-
(a)benefit as defined in section 122 of the Contributions and Benefits Act;
(b)any income-related benefit; or
(c)child benefit,
and every agreement to assign or charge such benefit shall be void; and, on the bancrupcy of the beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors."

And looked up the definition of "inalienable" which means, "not subject to being taken away from or given away by the possessor."

So how can a bank argue otherwise? Can any one explain this law more please? Can anyone provide more laws to apply to this situation please?

Afraid_of_Kittens · 16 April 2019 at 11:12AM

GBbusines wrote: »

I seen this law;

"Social Security Administration Act 1992
Miscellaneous
Certain benefit to be inalienable **

187- Subject to the provisions of this Act, every assignment of, or charge on-
(a)benefit as defined in section 122 of the Contributions and Benefits Act;
(b)any income-related benefit; or
(c)child benefit,
and every agreement to assign or charge such benefit shall be void; and, on the bancrupcy of the beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors."

And looked up the definition of "inalienable" which means, "not subject to being taken away from or given away by the possessor."

So how can a bank argue otherwise? Can any one explain this law more please? Can anyone provide more laws to apply to this situation please?

This old chestnut again.

Yes they can.

https://gclaw.wordpress.com/2014/09/04/are-welfare-benefits-exempt-from-bank-charges-under-section-1871-of-the-social-security-administration-act-1992/

https://legalbeagles.info/forums/forum/money-debt/banks-and-building-societies/40850-claim-benefits-then-bank-charges-are-unlawful-the-truth-is-that-they-are-lawful

The only way to protect your benefits is have them paid into a seperate bank account with no overdraft facilities and no bank charges.

sportsarb · 16 April 2019 at 11:16AM

From the link above:

“The purpose of the Social Security Administration Act 1992 Section 187 and section 45 of the Tax Credits Act 2002 is to prevent people’s benefit money being at risk by it being assigned over to a third party in settlement of a debt. It is not intended to prohibit the application of bank charges. Bank charges are in the nature of an expense, and are incurred by the holder of the account; tax credits and benefits are payable in order to help customers meet their expenses, and as such it is legitimate for banks to deduct charges from the balance of an account held in that bank, whether the money paid into the account comes from tax credits, benefits or other sources, such as earnings.”

It would be perverse not to allow the bank to use the money to recover their debt.

Switch payment to another account, however, and the bank with which you have a debt cannot touch it.

w06 · 16 April 2019 at 11:24AM

If they weren't it would surely mean that banks wouldn't allow folk in receipt of benefits to have an allowed overdraft facility. I for one would be pretty stuck without mine, circumstances currently mean my UC pays it off each month

Can banks take benefits for overdraft repayments?

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