Significant changes are being made to the Universal Credit system that will see the housing element of the benefit paid directly to landlords at the start of a claim.
Currently, both social and private tenants who claim the controversial benefit are responsible for making rent payments to their landlord themselves.
But research shows that many tenants would prefer to have the assurance that their rent is paid direct to the landlord and now it would appear that their right to do this will finally be introduced as part of a new Universal Credit system.
As Universal Credit payments are monthly it has left many claimants struggling to budget and ensure they have enough cash to meet the payments.
Many people seeking help with their Universal Credit claim are in rent arrears, according to Citizens Advice.
More generous advance loans for new claimants and an additional two weeks of housing benefit while they wait for Universal Credit payments to start were among the measures introduced by the government last year to address concerns that Universal Credit was pushing tenants into arrears.
But a report published by Citizens Advice in February revealed that 49% of those it helps with Universal Credit were in arrears on their housing payments.
This has discouraged some landlords from letting to tenants in receipt of Universal Credit because they are concerned they will not receive payment.
Only tenants on Universal Credit who are struggling to manage payments themselves and who are in arrears to their landlord can apply for a direct payment to landlords to be made in the form of an alternative payment arrangement (APA).
Landlords can also make the request by submitting a UC47 managed payment and rent arrears form, but just 5% of Universal Credit claimants in private rented housing have their rent paid directly to their landlord, according to the government.
But the new online system will allow private landlords to request that their tenant’s rent to be paid directly to them.
Caridon Landlord Solutions, which provides advice on Universal Credit and housing benefit to the rental sector, says it has been trialling the online scheme with the Department for Work and Pensions (SWP) since October last year.
Given around a third of Universal Credit claimants are private renters that means around 2 million people could have their rent paid directly to landlords moving forward.
The new scheme could also make it easier for other renters on Universal Credit to find private landlords who will accept them.
Sherrelle Collman, managing director of Caridon Landlord Solutions, commented: “Caridon believes that the paper forms are taking weeks to be processed, sometimes getting lost along the way and all the while rent arrears are mounting up.
“We have been working with DWP to develop an agile online system, making suggestions for adjustments to ensure it is as user friendly and efficient as possible - not only to get payments made directly to landlords where necessary, but also to speed up the process.”
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This is a step in the right direction but still not gone far enough. As stated above this will only apply to UC tenants who are already in arrears. I would prefer it to be widened to allow the landlord to receive payment direct for ALL UC tenancies as a matter of course. It is no good allowing the tenant to fall into arrears for several months before payment is made. Landlords have monthly bills to pay and those bills cannot wait several months. It would make the system easier to manage by all sides if the payment came direct from UC to the landlord immediately the UC claim is made.
Direct payment is no use UNLESS they REMOVE the 'clawback' possibility.
So that plus UC in advance plus a guarantor plus paying my required rent would be the only way I would take on a HB tenant.
So I have never taken any on as they fail my BUSINESS requirements!!
Maybe they won’t claw it back next from landlords then perhaps progress may be made ! Guarantors still essential
I still will not being accepting UC claimants, as Darryl above says it's no good waiting until the tenant is already in arrears, it is unlikely the UC payment will cover the full rent, and these payments are payed monthly in arrears, no good to me.
As both a landlord and a tenant I can see the benefits and drawback of this proposal. Benefits are obviously that the HB is paid directly, albeit with a delay. Drawback as a tenant, I wouldn't necessarily want my landlord to know if in receipt of HB, especially if the landlord if a DSS hater despite me being able to promptly pay the rent each month.
I refuse to take on DSS tenants.
I am NOT a DSS hater.
But I refuse to engage with a system which attempts and succeeds in ripping me off.
Since I submitted my UC 47 in November last year I have yet to receive s penny.
I may have to report the matter to the police as the DWP is illegally denying my tenant his due HB.
The one Housing Benefit tenant i have the rent is paid dirct to me every 4 wks and has been for past 5 years the moment that changes its bye bye tenant, no excuses, gone immediately and the local council know that.
God help us tax payers, How much is 5 years rent plus Benefits, free loaders have destroyed the economy of the Country.
And they wounder why we hate them !
I think it is more hate the system.
Essentially both LL and tenant are victims of an appalling bureaucracy.
This causes LL and tenants to behave in certain ways which ultimately results in LL not wishing to engage with the system.
Hi Paul Barrett
How is reporting to the police going to help you or your tenant ?
Because the DWP manager is FRAUDULENT in denying the valid claim.
Civil Servants commit crime.
Whoever is responsible for denying the valid claim is committing fraud.
Handily the police station is next to the JC so not far for the Police to come to arrest the criminal DWP civil servant!!!
My tenant has mental health issues but as said previously if ever and for what ever HB was stopped or delayed my tenant will no longer be my tenant.
We’ll all have mental health issues the way we are treated, pillarised, wronged, blackguarded, taxes to the eyeballs, criminalised, slave labour just to house other people, no one concerned about LL’s health we don’t have the rights of a dog.
I have a tenant from a local authority whose HB Is paid four weeks in arrears as I insisted for it. I realised only after I had signed the tenancy contract and had given away copy of the contract that I could not cancel. There is no deposit either. If the HB is paid direct to the LL S/he would be responsible to refund/ repay if anything goes wrong with HB entitlement discovered by the DSS even after months later. The HB entitlement is based on the local housing allowance determined by the authorities and on your tenants financial resources. Any discrepancy found by the authorities can impact on the HB paid in the earlier months for which recovery , if any would be made from the LL WHO IS BEING PAID DIRECTLY. I find this a big disadvantage and it can happen if your tenant’s income varies on a daily basis and he has to submit his accounts to them on demand.
Could someone tell me if the
Someone who receives HB PAID DIRECT TO LL WAS ABLE TO HAVE A DEPOSIT AND RENT IN ADVANCE AS OPPOSED TO IN ARREARS
Under no circumstances should LL accept direct payment unless evicting a tenant.
'Clawback' is just too big a risk.
A better way is to insist the HB tenant joins a Credit Union.
The the FULL CONTRACTUAL RENT may be deducted from the UC amount and sent to the LL BEFORE the tenant can get their hands on it.
Of course the tenant could stop UC bring paid to their CU account.
If this happens the LL will know he is about to be ripped off and will arrange NTQ.
A CU is a third party and therefore the DWP would not be able to impose 'clawback' on a LL.
The tenant would be the one liable to pay back anything the DWP required.
That in itself is an issue as HB is the last element of UC to be calculated within the OBC.
In the hierarchy of recovery paying HB doesn't figure very high.
So the LL could find very little HB being paid!
I had an associate LL who was forced to repay £15000 under the old HB system from 20 years ago.
So that would be like £25000 now.
'Clawback' is something LL should be terrified of................... DON'T accept direct HB payment!
Using a CU is a great method and assists the tenant as well.
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