A court has ruled unlawful a DWP system that automatically approves landlord requests to deduct significant amounts from tenants’ universal credit payments without consulting the tenant.  

The case was brought by a tenant who discovered £500 had been deducted from his universal credit at his landlord's request, despite an ongoing dispute over property repairs.  

The DWP’s “click-screen” program allows landlords to claim up to a fifth of a tenant’s monthly universal credit allowance for rent, bypassing both tenant and welfare official checks.  

Following the ruling, the DWP must implement safeguards to protect tenants in a process that handles tens of thousands of landlord deduction requests annually.

The process was declared unfair and unlawful by a judge earlier this month in a hearing brought by Nathan Roberts, a law graduate and former police control room worker who argued it was “clearly arbitrary and an abuse of process”.

Roberts, who had been in dispute with his landlord, Guinness Partnership Trust, over its alleged failure to carry out repairs, argued that it was unlawful for DWP to pay the £460 rent element of his benefits and a £44 deduction for alleged rent arrears direct to Guinness without consulting him.

The judge, Mr Justice Fordham, said it was unfair that tenants on universal credit who could be adversely affected by rent arrears deduction and rent diversion requests had no opportunity to make representations before the deductions were approved. The process excluded and disempowered tenants, he said.

There was a “real possibility” that DWP officials, known as decision-makers, were being directed by the computer to approve deduction requests regardless of whether delaying or blocking the request was in the tenants’ best interests, he said.

By failing to consult claimants, DWP decision-makers were only getting “one side of the story”, the judge said. In a case of a dispute over repairs, where withholding rent may be the “only leverage which a tenant has” DWP decision-makers may “unwittingly and unknowingly” damage protections afforded to tenants.

He added that there were “real-world impacts” on tenants, who, even if they successfully challenged the decision through lengthy internal DWP appeal processes, would not be able to reverse the deductions for months, during which they would be on reduced benefit.

Roberts’s formal appeal to DWP that he did not owe his landlord money was considered for three months by officials. The DWP then rejected the appeal, only to reverse that decision a few days later when they learned he was taking legal action against it.

A Department for Work and Pensions spokesperson said: “We are now carefully considering this judgment. Millions of people rely on our welfare system every year and it is vital that it can be accessed by all who need it.”

The case revealed that although the DWP had no explicit policy to exclude claimants when making a decision about landlord’s deduction requests, the computer program directed them to automatically approve the request, Roberts’s lawyers said.

“Even if the decision-maker could in theory unplug the computer, make contact with the claimant and reach their own decision, that’s very unlikely,” said Emma Varley of Bindmans solicitors.

“The computer program is, in effect, a policy which directs DWP decision-makers that it’s unnecessary to give universal credit claimants the opportunity to make representations before making payments to their landlords,” she added.

Currently, requests for rent arrears deductions made by social and private landlords are approved automatically. Requests for direct payment of rent by social landlords go through as a matter of course, while claimants are given a limited period to challenge direct payment requests by private landlords.

Processes to make it easier for social landlords to request direct rent payments and deductions where tenants have at least two months of rent arrears were introduced in 2017 to protect vulnerable tenants – and landlord finances – from a wave of evictions caused by the introduction of universal credit.

The case follows a separate ruling from more than two years ago in which a disabled woman successfully challenged the DWP’s policy of allowing utility companies to automatically deduct hundreds of pounds from clients’ incapacity benefit payments without their consent.