Can my bank use my benefit to repay an overdraft?

First right of Appropriation

Can my bank use my benefit to repay an overdraft?

Banks are not allowed to use benefits to repay an overdraft. Benefits include Housing benefit and Test and Trace Support Payments awarded by South Derbyshire District Council.

You can protect your housing benefit payments by telling your bank it should only be used to pay your rent. This protection is called a 'first right of appropriation of funds order'.

Similarly, Test and Trace support Payments are to provide basic living costs when you have been instructed to self-isolate and have lost earnings because of this. You can use the first right of appropriation to pay for essential items such as food and utility bills.

You will need to write to your bank to tell them what you need to use the money for.  If your bank has already taken the funds and has not left you with enough to cover your essential bills, you should contact them to request a refund or partial refund so that you can meet your living expenses, and make alternative arrangements to repay your overdraft.