Millions of renters on Universal Credit to benefit from rent being paid directly to landlords

MILLIONS of Universal Credit claimants in private rented accommodation could soon benefit from the option for rent payments to be paid directly to their landlord.

Currently, both social and private tenants who claim the controversial benefit are responsible for making rent payments to their landlord themselves.

As Universal Credit payments are monthly it's left many claimants struggling to budget and ensure they have enough cash to meet the payments.

It's also discouraged some landlords from letting to tenants in receipt of Universal Credit because they're worried they won't get paid.

This is a shake-up from housing benefit, which Universal Credit has replaced, that saw rent payments made directly from the state to landlords.

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.

This is called an "alternative payment arrangement" (APA).

These are considered on a case-by-case basis by Universal Credit staff and claimants can make the request by ringing the helpline, via their online journal or by talking to their work coach.

Landlords can also make the request by submitting what's known as a "UC47 managed payment/rent arrears form".

Currently, one third of Universal Credit claimants in social rented housing have their rent paid directly to their landlord, according to the Government.

But in the private sector, that number is only 5 per cent.

Just under 2million people were on Universal Credit in April 2019 with around 7million expected to be by the time the roll out is complete in March 2023.

Given around a third of Universal Credit claimants are private renters that means around 2million people could have their rent paid directly to landlords in future.

So what's changing?

The Government announced plans earlier this year to build an online system for private landlords, so they can request their tenant’s rent to be paid directly to them.

And it's thought this will be launched by the end of the year.

Caridon Landlord Solutions, which provides advice on Universal Credit and housing benefit to the rental sector, says it's been trialling the online scheme with the Department for Work and Pensions (DWP) since October 2018.

It believes the online system will be ready to roll out nationwide this year, although DWP won't confirm or deny the reports.

According to Caridon, the pilot scheme sees the "complicated" UC47 form axed with the time taken to process payments falling from three weeks to just two hours in some cases.

Managing director of Caridon Landlord Solutions, Sherrelle Collman, said: “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."

A spokesperson for the DWP would only add: “We regularly look at ways to improve Universal Credit and earlier this year we committed to increasing the support available for private landlords.”

Dawn Jackson, head of grants at Turn2us, reckons the online system could make it easier for Universal Credit claimants to find rental accommodation but warns that it doesn't fix the root of the problem.

She said: “Since Universal Credit has been rolled out we have heard from many applicants who say they cannot find a home to live in as landlords are just flat out refusing to rent to claimants, which has no doubt led to rising homelessness figures.

“As a result, we welcome this trial, however it is vital that we fix the root of this problem as well.

"Handing over billions in rent money to private landlords is not a long term solution; we simply need more social housing, more affordable rents and the end of the five week wait for Universal Credit to avoid arrears in the first place.”

Sadly for social tenants this system won't be an option for them and DWP wouldn't confirm or deny if it's looking into a similar scheme for these claimants.

The Sun has been calling for claimants' first Universal Credit payments to be slashed from five weeks to two weeks as part of its campaign to Make Universal Credit Work.

We also want to see the work allowance increased, the taper rate slashed and childcare payments made upfront rather than in arrears.

It comes as research revealed in May that 120,000 people on Universal Credit have fallen behind on rent – and 500 have been evicted.

Universal Credit families are also at risk of losing their homes due to soaring rents and they now have to pay hundreds to top up housing benefit.

DWP has previously admitted errors in the way the benefit is calculated that could see tenants who pay rent weekly missing out.

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