UC payment into a friend’s account
We have a tenant who advises he has not paid his rent as his UC payment goes into it goes into someone else’s bank account and they have spent it . The tenant was using this arrangement as his bank account was overdrawn
Please can anyone confirm:
Is this arrangement allowed by UC ?
Is it an easy process to complete prior to UC agreeing ?
This was not allowed last year and I am sure there hasn’t been a change in practice. DWP guidance…...
............. “Important: Universal Credit must be paid into a bank account, Building Society or Credit
Union in the claimant’s name. If they don’t have their own account, they are required to
! Important: If the claimant has been refused a bank account then seek advice from the SPOC
1.1 Explain to the claimant that:
“This verification interview is only to confirm that you have a bank account in your name” ............
It does happen though. I spoke to one of my client’s today who has UC paid into her mother’s bank account. I can’t remember if it was easy or otherwise for her to set this up but I seem to remember that UC used to be quite happy at one time for it to be paid any old where if the person didn’t have an account themselves.
Thank you for the replies , much appreciated
My mistake. Guidance has changed though not completely consistent and Work Coach now has discretion.
“You can use a friend or family member’s bank account for your first payment with their permission. You’ll need to get your own before your second payment. You can update your bank details in your online account once you get a bank account.”
See https://www.legislation.gov.uk/uksi/2013/380/regulation/46 - I dealt with one such case, it was easy to set up, however the third party account holder, will need to provde a letter giving their permission.
Surely the issue here is the potential financial abuse of a claimant who can’t access their money and has had it spent by someone else?
I think the DWP are too eager to agree to arrangements like this without considering the pitfalls and without making the other alternatives - direct payment to the landlord, Payment Exception Service - known to the claimant.
The UC claim form allows payment to be set up to a bank account not in the name of the claimant (or either claimant in the case of a joint claim), but this arrangement should be temporary for the AP1 payment only, after which an alternative arrangement must be made - whether that’s the claimant opening an basic bank account of their own or setting up Payment Exception Service. I haven’t personally come across a case where this kind of arrangement has been allowed to persist. Due to the risk that the claimant won’t ever receive UC paid into someone else’s account - I advise clients to avoid this option and seek immediate set up of PES for new claims - although this too can be fraught; I’ve had to direct JCP staff to the info on GOV.UK because they were unaware of it.