Benefits and the Social Security Administration Act

Social Security Administration Act and Tax Credits Act

The two Acts of Parliament that govern how benefits are paid are the Social Security Administration Act 1992 and the Tax Credit's Act 2002. Both of these have clauses which apparently make it unlawful for banks to impose bank charges on benefits:

Social Security Administration Act 1992 Section 187:

— 187.—(1) Subject to the provision of this Act, every assignment of or charge on– (a) benefit as defined in section 122 of the Contributions and Benefits Act; [3(aa) a jobseeker’s allowance;] (b) any income-related benefit; or (c) child benefit, and every agreement to assign or charge such benefit shall be void;

Tax Credits Act 2002 Section 45:

— 45. Inalienability (1) Every assignment of or charge on a tax credit, and every agreement to assign or charge a tax credit, is void;

HOWEVER by 'charges' they DO NOT MEAN BANK CHARGES. What is meant is things like attachment of earnings and charging orders.

Although there is some ambiguity, if you took a case to reclaim bank charges to court based on s187 of the Social Security Administration Act 1992 or s45 of the Tax Credits Act 2002 the court would almost certainly find against you.

No one is saying that the banks have the right to take money from benefits, only that you can't use the Social Security Administration Act 1992 or the Tax Credits Act 2002 to stop them. Money taken from benefits is unlawful - but unlawful by virtue of the Unfair Terms in Consumer Contract Regulations 1999 and the common law on penalties in contracts , not under the Social Security Administration Act 1992 or Tax Credits Act 2002 (unfortunately).