Benefits and penalties for witholding them

[Nattie]

Is there any such penalty for the bank if they withold benefit because of charges?

[Celestine]

i assume you mean state benefits?

I don't know if there is a penalty against the bank itself for doing this but you can write a letter of appropriation to stop them.

Maybe this old thread on CAG needs looking at and a letter drafting for Beagles' template library. Fancy a job Nats?!

Is the bank taking your Benefits ? - Consumer Action Group

[Nattie]

no my question is that there is a law with regards to benefits and please no quotes to that crap on the other site, try an MSE links instead
Is there a punishment for failing to do this in the first place?

[Guest]

Not sure if it is actually illegal for a bank to take benefit money in charges, however, I have seen it written that taking benefit money contravenes s.187 of the Social Security Administration Act 1992 as s.187 clearly states that any agreement to charge shall be void against any benefit as defined in s.122 of the SSAA.

In addition, I have included an excerpt from a letter written by Patricia Hewitt MP to the Chief Executive of the British Bankers Association, although this was regarding the banks' right of set-off.

Right of set-off

Direct payment of centrally administered benefits and tax credits means that many benefit recipients now have their benefit income paid directly into basic bank accounts. This is income which the person concerned requires to sustain a minimum standard of living. Patricia Hewitt , Secretary of State for Health, recently wrote to Ian Mullen, Chief Executive of the British Bankers Association, about this matter, stating:

“I have recently heard of situations where people have become overdrawn in one of their accounts, or have incurred bank charges but have no money in their accounts to pay them, and as a result banks have taken the money from ‘direct payment’ accounts……I would like to highlight our concerns. I recognise that banks are legally entitled to do this when they are simply recouping a debt from an individual’s alternate bank account.
However, a direct payment account is not money that belongs to the individual; it is public money to be spent on the person’s care needs. Taking this money will mean that their care needs are not met."

Letter from Patricia Hewitt, Secretary of State for Health to Ian Mullen, Chief Executive of the British Bankers Association, 26 October 2006

[Nattie]

My bankers understanding is that where benefit has eaten into someone's benefit, they are entitled to the whole amount over the branch counter. THe charges will still remain as will the debt but the money is there's to take.