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Universal Credit in the Private Rented Sector

Universal Credit in the Private Rented Sector

 

Universal Credit incorporates the six existing benefit packages (Income-based Jobseeker’s Allowance; Income-related Employment and Support Allowance; Income Support; Child Tax Credit; Working Tax Credit; Housing Benefit or Local Housing Allowance) and instead of being paid on a two weekly basis it is now replaced with one monthly payment, paid in arrears, to the claimant's bank account.

 

Claimants are now required to submit appropriate evidence to support their claim for UC which should include their tenancy details and monthly rent and it is the Tenant’s responsibility to notify DWP of any rent increases during their claim period. Couples will be paid their UC entitlements into either a joint account or into one bank account with any other adult occupiers in the property receiving their entitlement separately. Claimants are offered Personal Budgeting Support to ensure that they are able to manage their entitlement effectively to ensure that all household payments are covered, although in some circumstances an application to DWP to have the housing benefit proportion of UC paid directly to the Landlord may be considered.

 

The new policy is being introduced in stages across England, Scotland and Wales and eligibility and entitlement will depend on the individual's personal circumstances.

 

Landlords in the areas where the scheme has been rolled out are however already experiencing problems as many are finding that the process their tenants are having to go through to request direct payment from the DWP is too long, leaving rent arrears mounting up with many Landlords subsequently not being able to meet mortgage repayments.

 

This news is likely to have a detrimental impact on the private rented sector as fewer Landlords may be willing to let their properties to those on low incomes or in difficult situations claiming Universal Credit for fear of not receiving their rent.   The knock-on effect of which could result in pressure on local authorities to find alternative accommodation and an increase in Landlords taking Tenants to court for eviction notices and to recover unpaid sums.

 

We would recommend that any Landlord expecting to be affected by the changes to the benefit system should familiarise themselves with the new Universal Credit guidance  (https://www.gov.uk/guidance/universal-credit-toolkit-for-partner-organisations)  and to engage with their tenants to ensure that they understand their responsibilities going forward.

 

For further information concerning the Universal Credit and how it might affect you please contact Sam Benson at SamB@rhrwclutton.co.uk.

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