Can a bank take housing benefit to pay my overdraft?

No. Banks are not allowed to use Housing Benefit or any other benefit to repay an overdraft.

How to protect your Housing Benefit payments

You can protect your Housing Benefit by telling your bank that the money must only be used for specific payments, such as your rent.

This protection is called a first right of appropriation of funds.

A first right of appropriation allows you to tell your bank how money paid into your account must be used.

You can use this right for any money paid into your account, not just Housing Benefit.

For example, you may want to:

You must tell your bank exactly how you want these payments to be used.

You must write to your bank or building society at least 7 days before your Housing Benefit payment is due.

Your letter should clearly state that:

You may want to include wording like this in your letter:

On or around August 20th, and every 2 weeks after, my Housing Benefit will be paid into my current account number 0101010101.

I am exercising my first right of appropriation over these funds and wish you to pay the following items from it:

£75 standing order payable to my landlord, Mr Smith on the 25th of the month.

Keep a copy of the letter you send to your bank
You may also want to ask your bank or building society to confirm your instructions in writing

This can be helpful if there is a dispute later.

A first right of appropriation does not automatically stop your bank from making other payments from your account.

If there are payments you no longer want to make, or cannot afford, you must give your bank separate cancellation instructions.

If you do not cancel these payments:

Payments used to repay a loan with the same bank cannot be cancelled.