Government to overhaul landlord benefit deduction scheme

The government is to scrutinise a controversial mechanism allowing landlords to request rent directly from tenants’ benefits.

It follows a story on Property118 and recently in national media about Nathan Roberts successfully challenging deductions from his benefits.

They had been automatically redirected to his landlord for arrears and ongoing rent, despite a dispute over property repairs.

Now Work and Pensions Secretary Liz Kendall says a review will address growing unease that the practice, intended to prevent evictions, might instead be placing tenants into financial hardship.

The decision follows the Department for Work and Pensions (DWP) choosing not to appeal the court ruling.

Under the current setup, a digital system greenlights landlord applications to withhold up to 20% of a claimant’s monthly Universal Credit without input from either the tenant or the DWP.

This has sparked concerns over fairness and transparency.

Approval of landlords’ requests

Ms Kendall said: “I am determined to right the wrongs that have persisted in the benefits system for too long.

“The automatic approval of landlords’ requests for tenants’ benefits to be deducted is one of these.”

She added: “As well as urgently reviewing this system, I am bringing forward major changes to the health and disability benefits system so that it works for everyone, underpinned by the biggest employment reforms in a generation.

“We will continue to listen to people’s concerns, and transform our benefits system to one of fairness, not punishment.”

Benefits system needs reform

The Minister for Social Security and Disability, Sir Stephen Timms, said: “The benefits system needs urgent reform, and we are taking action across the board to do this – whether that’s tackling the huge accumulation of debt by Carer’s Allowance recipients through no fault of their own, or this automatic deduction of benefits purely at the request of a landlord.

“Combined with our efforts to Get Britain Working and our upcoming health and disability benefits reform, all of this will lead to better support for those who need it, and open doors for those who can work.”

The DWP says it now plans to explore alternatives, ensuring landlords receive due payments while safeguarding claimants from spiralling debt.