DWP loses power to deduct from benefits during bankruptcy
On 14 December 2011 the Supreme Court dismissed the appeal of the DWP in the case of Secretary of State for Work and Pensions v Payne and Cooper. In a unanimous decision the Supreme Court decided that the power to recover a debt included in a Debt Relief Order by deductions from benefit is a “remedy in respect of the debt” which must not be exercised during the moratorium.
The Supreme Court also decided, overturning previous case law, that there is no difference between DROs and bankruptcy in this respect. They ruled that the DWP loses it’s power to make deductions from benefit for a debt included in the bankruptcy as soon as a bankruptcy order is made.
To read the judgment go to the Supreme Court website at www.supremecourt.gov.uk/decidedcases/index.html

Nucleus has come across cases where the official receiver is still allowing direct deductions to be made for overpayments. If this is happening to you please get in touch with one of our debt team who can help.