CCM8530 - Closing the Examination

Direct Debits

When payment is to be made by four or more instalments (that is, at least three Direct Debits), the claimant should be asked at the settlement interview, or if none is held, when the draft letter of offer is sent, if payment by Direct Debit is required. It should be noted however that Standing Order arrangements are NOT possible.

Forms DD1(Cumb) (Direct Debit Instructions) and DD2 (Explanatory Leaflet) should be handed or sent to the claimant, the former for completion and return to you with the letter of offer if the Direct Debit facility is required.

The Accounting & Payments Service Network Unit must receive the completed form at least 21 days before the first Direct Debit becomes due, and in good time for the mandate to be logged with the claimant’s bank or building society, within 2 months of the claimant signing and dating the form. Under current rules applied by the banks and building societies, the claimant should not be asked to indicate on the mandate a specific date for, or amount of, payment.

It is important that the letter of offer itself does not refer specifically to payment by Direct Debit, as this could restrict the ability to recover by other means in the event of default. A standard form of words should therefore be used, providing for payment on or before the LAST day of each month, to enable collection by Direct Debit on the date in each month chosen by the claimant.

You should inform the claimant that they will be responsible for making the first instalment in the usual way and that the A&PS Network Unit will set up the Direct Debit facility for all future instalments. If, exceptionally, the timing of the second instalment (the first Direct Debit payment) does not allow the A&PS Network Unit to have received the completed form DD1, 21 days in advance, it will be necessary for them to issue a payslip for the second instalment. You should draw their attention to this when you send them the 94A(2) - (see CCM8680).