Test and Trace payments: Overdrafts and "first right of appropriation of funds orders"
If you're overdrawn when you receive your payment
You can protect your payment from being applied to an outstanding overdraft by telling your bank it should only be used to pay your rent or other essential bills. This protection is called a "first right of appropriation of funds order".
You can use this for any money being paid in to your account. You will need to tell your bank how to use these payments.
How to request a first right of appropriation of funds order
You need to write to your bank at least seven days before your payment is due, making it clear that any regular payments or future deposits from us are to pay for your rent or utility bills only.
For example, you may want to instruct your bank or building society:
"On or around (insert date) my Test and Trace support payment from Central Bedfordshire Council will be paid into my current account, number (insert account number). I am exercising my first right of appropriation over these funds and wish you to pay the following items from it: e.g. £400 standing order payable to my landlord, (insert landlord name) on the 25th of the month."
Keep a copy of the letter in case there is any dispute later. You may want to ask your bank or building society for a written acknowledgement of your instructions.
If there are any items you no longer want to pay from your account, or which you cannot afford, you should give your bank separate cancellation instructions. This is because the first right of appropriation does not stop the bank paying items as well as those you have listed.
If you do not cancel these items, your bank may return the items as unpaid, which they may charge you for. However, payments from your account to re-pay a loan with the same bank can't be cancelled.