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Uncertainty Remains Over Recovery Of Universal Credit Rent Arrears

Uncertainty Remains Over Recovery Of Universal Credit Rent Arrears

The UK Government are to introduce a mechanism to automatically recover rent arrears, alongside the direct payment of housing benefit to tenants.

Details released last week by the government explained that under the welfare reforms landlords will now be able to contact the Department for Work and Pensions (DWP) to request Universal Credit benefits designed to cover housing costs of tenants are paid to them once a prescribed level of rent arrears have been reached.

At this point the DWP will recover the arrears by docking universal credit payments to tenants.

In its response to a Communities and Local Government (CLG) select committee report on the implementation of universal credit, the government says deductions can be up to 5% under existing legislation, but the government are considering whether this level of deduction is appropriate for tenants claiming universal credit, or if it should be increased in the future.

Under the new universal credit scheme, which is being rolled out nationally in the UK from autumn 2013, a range of benefits, including Housing Benefit (HB) or Local Housing Allowance (LHA), will be combined into a single monthly payment termed “Universal Credit”.

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Direct Payment Of Universal Credit Can Be Made To Landlords with Tenants in Arrears

Direct Payment Of Universal Credit Can Be Made To Landlords with Tenants in Arrears

The Government’s change of policy will now allow automatic direct payments of housing benefit to landlords providing the tenant is more than 8 weeks in arrears.

The government rethink has been welcomed by the Residential Landlords’ Association (RLA) and all UK landlords who house tenants in receipt of housing benefit.

Yesterday was the day the Government’s first flagship universal credit pilot scheme went live in Ashton-under-Lyne, Greater Manchester, and a circular to all housing benefit staff revealed that automatic direct payments to landlords will now be allowed in the pathfinder areas.

The policy change was tucked away on the last page of an obscure circular published by the Department of Works and Pensions (DWP) yesterday. Universal credit expert and RLA trainer, Bill Irvine, spotted it and immediately informed the RLA.

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Welfare Reforms Could Increase Fraud

Welfare Reforms Could Increase Fraud

The Government’s controversial welfare reforms will leave the benefits system more vulnerable to fraud, according to a group of MPs.

The Government decision to press on with welfare reforms means that Universal credit is set to be implemented nationally from October 2013 and replaces a string of existing benefits such as local housing allowance (LHA), housing benefit (HB) and child tax credits.

Changes to IT system for universal credit could make it harder to distinguish fraudulent claims from those that are genuine, and there are calls for the government to give swift assurance that the introduction of Universal Credit will not cause a rise in benefit fraud,

MPs issued the warning after a report by the Communities and Local Government (CLG) Committee into the extent of the welfare reforms highlighted several concerns about the new Universal Credit scheme.

The first trial of the new system begins on 29 April 2013 in Ashton-Under-Lyne, Greater Manchester.

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