A Third Party Deduction is a way to pay your bills straight from your benefits. You can apply for this deduction if you receive:

• Income Based Job Seekers Allowance.
• Income Related Employment and Support Allowance.
• Income Support.
• Pension Credit.
• Universal Credit.

Deductions are made each time your benefits are paid. £3.65 will be deducted from each benefit to pay off the debt you owe, sometimes plus an extra amount to cover your bills in future.

You can pay more than one company but if the total deduction from your benefit is more than 25% then you have to formally agree to it. You can't use Third Party Deductions to pay an old supplier, so if you have moved house you can't pay your old landlord or if you have switched energy provider you can only pay your current supplier this way.

You cannot have more than three deductions for debts you owe, but you can have more than three deductions towards your current bills. For example if you owe money to your water provider, your landlord and your gas company you can have those three deductions, but you couldn't pay any additional debt this way as that would be more than three deductions. You could pay for your current water, rent, gas and other bills as this is payment for what you are using now.

If you claim Universal Credit your landlord can request Third Party Deductions from your benefit to help clear your arrears, this is done as part of an application for an Alternative Payment Arrangement.

If you wish to pay bills this way you should contact Job Centre Plus and the company you wish to pay. Job Centre Plus will assist you in setting up a Third Party Deduction.