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Stopping benefits being taken to pay your overdraft

Can my bank use my housing benefit to pay my overdraft?

No, banks are not allowed to use housing benefit or any other benefit to repay an overdraft, if you have told them you want to pay particular bills from the money.

This is called first right of appropriation and can be used to protect wages and benefit payments, including the new social isolation payments, from being used to pay overdrafts rather than certain essential bills.

How does this work?

You need to contact your bank before the payment is made to your account, asking them to set aside the amount so that it can be used to pay a certain bill.

The National Debtline has more information and a letter template to help you contact your bank.

When this content has been updated

Last updated 5 October 2020