As many will be aware there have been a lot of changes to welfare benefits over the past few years. The main change is the introduction of Universal Credit which will eventually replace all benefits including housing benefit. Universal Credit is being introduced in stages but a large proportion of my clients are now receiving this benefit. Universal Credit is made up of personal allowance and housing allowance, if you are entitled to help with paying your rent. The housing element is usually paid directly to the person who is claiming the benefit. It is then that individual's responsibility to pay their rent from their housing allowance.
However, a recent survey by a National Housing Federation has revealed that around one in three tenants of social housing who claim Universal Credit have their housing allowance paid directly to their landlord. The survey of 25 housing associations in May 2015 revealed that 1,082 out of 3,009 people claiming Universal Credit were on an ‘alternative payment arrangement’ (‘APA’). This suggests that there are a lot of social housing tenants who are unable to manage their finances and have, as a result, fallen into rent arrears despite the fact that this was not the way this benefit was intended to operate.
Another part of the APA is the deduction of money from the claimant's personal element in the form of direct arrears payments. The standard amount that is deducted is £62.93 per month. However, there have in my experience been a lot of teething problems with the APAs. I have had a number of clients who have had money deducted from their personal element in direct arrears payments only for this money not to be passed on to their landlord. I have also had cases whereby landlords have not received my clients' housing element despite an APA being in place. I find this concerning particularly as this can quickly lead to arrears building up and either result in the landlord applying to Court for a Possession Order or worse still a Warrant of Eviction to evict the tenant from their property. The DWP still seem to be trying to iron out these problems but with the claim not yet in full swing across the UK it is unclear how quickly the problems will be resolved. In the meantime, many people are at risk of losing one of the most valuable things to them; their home. My advice to tenants who are claiming Universal Credit would be to keep a very close eye on their claim, especially if they start receiving letters from their landlord saying that they owe them rent.
If you receive any letters from your landlord threatening eviction and you want advice about your rights you can contact one of our housing specialists on 0175 321 6399.