The monthly round-up of news, guidance, legislation, and case law from Shelter's Specialist Debt Advice Service.
News and legal updates
In this month's legal round-up, find details on recording pension values in a DRO moratorium, energy suppliers benefit deductions, and an illegal money lending report.
Recording pension values for clients who become eligible to draw down from their pension during the DRO moratorium
The DRO Team has confirmed that approved intermediaries do not need to ask for pensions information in some circumstances. Intermediaries can record £0 for the pensions value in a DRO application for clients who:
turn 55 during the DRO moratorium, and
become eligible to draw down from their pension (lump sum or income) but choose not to
This is important when an approved intermediary has a client aged 54 or older. The DRO Team strongly advocates that the intermediary highlights to the client how accessing a pension could affect their DRO moratorium income and assets limits.
Energy suppliers must obtain consent for benefit deductions
Since 1 April 2023 energy suppliers must obtain the benefit claimant’s consent before requesting new or increased deductions from benefits.
Social Security Benefits (Claims & Payments) (Amendment) Regulations 2023
New code of practice for energy suppliers
Energy suppliers have signed up to a new code of practice agreed with Ofgem. The code sets out expectations for when it is acceptable to install a prepayment meter involuntarily.
The new code also expects suppliers to make ‘multiple contact attempts’ and a ‘welfare visit’ before installing a prepayment meter. Section 2.10 details ‘high risk’ scenarios where suppliers must not install a prepayment meter. This includes households where an occupant is 85 years old or over.
Involuntary PPM – Supplier Code of Practice
New universal priority services register
Ofgem has called for a new universal priority services register to be created to protect vulnerable households. Ofgem wants to see a joint register between water and energy, but also wider sectors and government.
Ofgem believes that when vulnerable customers tell one agency about their vulnerabilities this should be shared with all the other agencies (referred to as ‘tell us once’).
Financial Ombudsman Service award limit increased
The FCA has confirmed that the £350,000 award limit increased to £415,000 for complaints made to the Financial Ombudsman Service (FOS) from 1 April 2023.
For complaints about actions that took place before 1 April 2019 the limit has increase from £160,000 to £190,000.
Illegal money lending report published
The Centre for Social Justice has published a report highlighting training gaps for debt advisers dealing with illegal money lending debts.
The report sets out six recommendations for government, the Money and Pensions Service (MaPS) and debt advice agencies. These include:
improving consumer awareness of illegal money lending
integrating relevant training as part of an adviser’s introductory training
focussing on adviser confidence in discussing an illegal money lender with clients
Support for mortgage interest waiting time reduced
The government has announced that the waiting time for universal credit claimants to receive support for mortgage interest has reduced from nine months to three months.
Debt packager referrals to end for Creditfix
Creditfix has announced that it will not accept referrals from third party debt packager firms from 1 May 2023
Report on upfront insolvency fees preventing DROs and bankruptcy
Citizens Advice has published a report detailing scenarios where people cannot afford going to apply for insolvency.
The report calls on the government to remove upfront application fees for DROs and bankruptcy so that more people can make a fresh start.
Citizens Advice report on upfront insolvency fees
Changes to debt advice grants
The Money and Pensions Service (MaPS) has announced that, due to increasingly complex cases, it has changed the level of clients to be seen through community-based debt advice.
MaPS believes this change will mean that clients get more time with an adviser and ensures that workloads are more manageable.
Case law
Find debt case law summaries by topic on Shelter Legal.
Injunctions and debt moratoriums
The High Court refused to extend an injunction that prevented the debtor applying for a further moratorium under the Debt Respite Scheme Regulations.
Kaye v Lees [2023] EWHC 758 (KB)
Disability premiums and benefits in a DRO
When a debt relief order (DRO) approved intermediary completes a debtor's DRO application they fill out the debtor's income and expenditure. The debtor may inform the intermediary that they receive a disability benefit.
Income and lump sums of some disability benefits do not affect a debtor's eligibility for a DRO.
A professional contacted the SDAS consultancy line to ask about monthly payments of backdated universal credit disability elements and how they are treated in a DRO. Read the response from SDAS.
Read about the treatment of disability benefits and premiums in a DRO on Shelter Legal