DWP requires consent for new or increased Fuel Direct deductions for ongoing energy costs

From 1 April 2022, the Department for Work and Pensions (DWP) will only agree to new or increased deductions for ongoing energy costs if the customer gives consent, according to National Debtline guidance for Scotland and for England and Wales¹. The change affects deductions taken from benefits to cover ongoing gas and electricity costs, rather than arrears alone.

The same wording appears in both the Scotland and the England and Wales versions of the guide, so the position described applies across Great Britain¹. Neither guide states how consent is to be given, nor what happens to deductions already in place before that date; those points have not been reported.

Deductions from benefits are one of the routes by which energy arrears can be repaid. National Debtline says that where a supplier knows a customer is having difficulty repaying energy bills, it must offer the option to pay arrears by regular instalments under an agreed plan, by taking money from benefits for those on certain benefits, or through a prepayment meter if suitable². The England and Wales guide refers to the Fuel Direct scheme for paying towards energy arrears directly from benefits for people receiving certain benefits².

Other figures in the guidance are unchanged by the 1 April date. On back billing, suppliers should not usually charge for energy used more than 12 months ago where no accurate bill was sent for the same period, no statement of account set out the charges, or a direct debit was set too low to cover them¹. Where a supplier fits a prepayment meter instead of disconnecting supply, it may charge up to £150, though no charge should apply where a health condition or vulnerability prevented the customer from dealing with the debt². If a prepayment meter is fitted and £500 or less is owed to the current supplier, the customer should be allowed to switch¹.

Help with bills differs by nation, as the two guides set out:

Why it matters for households

For anyone whose gas or electricity costs are being met through deductions from a benefit, the practical effect from 1 April 2022 is that a new deduction, or an increase to an existing one, needs the customer's agreement before the DWP will approve it¹. The guidance does not say whether deductions already running at their existing rate are affected, so that has not been reported.

Energy arrears remain a priority debt in both guides, because supply can be cut off if they are not paid². The protections described alongside the consent change include the 12 month back billing limit, the £150 maximum for fitting a prepayment meter in the circumstances set out, and the £500 threshold below which a prepayment customer should be allowed to switch supplier¹. Households in Scotland and in England and Wales are directed to different support payments, with the Scottish guide listing the Winter Heating Payment and the Pension Age Winter Heating Payment, and the England and Wales guide listing the Winter Fuel Payment and the Warm Home Discount¹.

What happens next

The consent requirement applies to new or increased deductions for ongoing energy costs agreed from 1 April 2022 onwards¹. No end date is given in either guide, and no further DWP announcement on the change is reported in them.

More on deductions from benefits, help with energy bills, which bills to pay first and the benefits and debt guides.