Universal Credit is a single monthly payment that replaces the following benefits:
- Child Tax Credit
- Housing Benefit
- Income Support
- Income-based Jobseeker’s Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
- Working Tax Credit
Many professional bodies have been calling for a hault to the rollout due to concerns over the amount of time tenants are waiting to receive initial payments and escalating arrears.
Some warn that rent arrears among tenants receiving universal credit are running at upto five times the level of those on the old system. Three councils whose tenants have already been moved on to universal credit said they had built up about £8m in rent arrears. Croydon, Hounslow and Southwark said that more than 2,500 tenants claiming it were now at risk of eviction.
MPs were told benefit claimants are more likely to have debt problems when claiming universal credit rather than housing benefit. This is due to new claimants often have to wait six weeks for their first payment with some waiting 10-12 week.
Tenant is in rent arrears?
The DWP expects landlords to follow their usual rent collection practices. However, if the claimant is unable or unwilling to resolve a payment issue that puts them at risk of eviction, the DWP can assist landlords by considering a managed payment to the landlord.
When arrears reach the equivalent of one month’s rent, the DWP will review the situation. Only following a notification from the claimant or the landlord. At this stage, the DWP can offer the tenant budgeting support and may decide to pay the rent directly to the landlord.
When arrears reach an equivalent of two months’ rent, the landlord or claimant can ask the DWP to consider an Alternative Payment Arrangement.
If the tenant is deemed vulnerable the housing and rent element of Universal Credit will go directly to the landlord.
If the government needs to ensure that it is easier for landlords to claim alternative payment arrangements. This would ensure rent arrears are kept to a minimum. Without these reforms, landlords may continue to be unwilling to provide homes to those on universal credit.
What are your thoughts as landlords or tenants?