Universal Credit – End of payment arrangement?

by Readers Question

11:59 AM, 8th July 2019
About 2 weeks ago

Universal Credit – End of payment arrangement?

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Universal Credit – End of payment arrangement?

I don’t know if anyone else had come across this, but a tenant was in arrears so Universal Credit were paying direct to me. The payments were for the period from the 19th of each month to the 18th of the next month and I used to receive the payment on the 25th.

The tenant left on the 5th of June so by my calculation I was due about 17 days rent. It had not arrived and I have attempted to phone them, but we all know how long that takes, so I have written to them and awaiting a reply. In between time I spoke to a fellow landlord and he has had a similar situation, he did manage to call them, but received two contradictory replies.

The first being that they had paid the balance of the rent to the tenants new landlord (which seems improbable). He then asked to speak to a supervisor who told him brusquely that they don’t make part months payments direct to landlords.

There is a passage on the DWP website which says that they do not make payments if it is not the tenant’s current address. Obviously in my case it was not her current address at the end of their period, but she had lived there for 17 days during that period. It also says they write to the landlord to inform them that the payment arrangement has ceased, but that hasn’t happened.

I don’t hold out much hope of getting the money, I assume it has gone direct to the tenant, but she denies it.

Just curious if anyone else has come across this.

Many thanks

William



Comments

CARIDON LANDLORD SOLUTIONS

23:48 PM, 8th July 2019
About 2 weeks ago

You may have not received rent due to the tenants BAP (Benefit Assessment Period)

The claimants assessment period for Universal Credit starts from the date their entitlement begins.

Claimants do not receive their first payment of Universal Credit until after the first assessment period has ended.

They will then receive the next payments of Universal Credit after each subsequent assessment period on the same date of the month, a month and 7 days.

Universal Credit is a complex benefit, any change that occurs is deemed to have happen on the first day of the assessment period, in some cases this can be favourable as the landlord will gain a whole months rent however in other cases this can be an issue as landlords can lose out and lose a whole months rent.
It all depends on the BAP.
For more information please feel free to contact me and I will be happy to send you some slides on how UC works.

tony tony

9:36 AM, 9th July 2019
About 2 weeks ago

Reply to the comment left by CARIDON LANDLORD SOLUTIONS at 08/07/2019 - 23:48
just another crazy rule , who ever makes these rules are incompetant , the landlord should be paid up to when the tenant leaves, how hard is that to work out

Bill irvine

9:41 AM, 9th July 2019
About 2 weeks ago

Hi William
DWP, as Sherrelle has explained above, pay UC, including the "housing costs element", on a monthly basis. Using your example, your ex tenant's Benefit Assessment Period (BAP) ran from the 19th to the 18th of each successive month, with payment made up to 7 days later (25th).
If the tenant vacates during the course of the BAP, even on the last day (18th) they receive NO housing costs for the period. Their circumstances are deemed to be those that apply on the 18th. So, in many cases, the outgoing landlord can easily lose that whole month's rent.
In contrast, let's say the tenant moved into a Caridon Property on the 18th June he would be treated as occupying that new property for the whole of the BAP, even though he's only been there for 1 day. So, in effect, he/she would receive, in full, Caridon's rental charge.
The "Whole month rule", as it's known, applies to any change of circumstances - a new baby is born; a new rental charge is applied, couple separate and make their own separate claims etc. As Sherrele suggests, the rule creates "winners & "losers". If you're aware of the rule, and your tenant's BAP, you can influence the outcome so as not to disadvantage you or the tenant e.g. agreeing the date the tenant vacates your property, where that's possible. property.
Bill Irvine

Seething Landlord

9:54 AM, 9th July 2019
About 2 weeks ago

This sounds like another reason to be very wary of accepting benefit tenants unless you have expert knowledge of the system and potential pitfalls but presumably the shortfall would be covered by the tenancy deposit.

Bill irvine

10:00 AM, 9th July 2019
About 2 weeks ago

Reply to the comment left by tony tony at 09/07/2019 - 09:36Tony
The rule has not been designed to aid or assist tenants or landlords. It was created because DWP aims to reduce Civil Servant involvement in the decision making process and rely on the UC IT system, to automatically apply the changes, reported by the tenant, using their online journal.
DWP's plans and assumptions about claimants routinely using their online journal and diligently reporting changes as they occur is already backfiring on it as the recent report, by the National Audit Office, relating to UC Overpayments has confirmed.

UC overpayments are now running at 8% of spend, more than double the amount that applied to HB/LHA. As the rollout of UC expands, in claimant numbers, by a factor of 3-5 times, over the next 4 years, the rate of overpayments is forecasted to rise even further. Not, at all, what DWP's hierarchy predicted 5/6 years ago when the new "flagship" benefit was first implemented in Ashton-under-Lynne!
Bill Irvine

Bill irvine

10:13 AM, 9th July 2019
About 2 weeks ago

Reply to the comment left by Seething Landlord at 09/07/2019 - 09:54
Today's working tenant. could be tomorrow's unemployed, benefit reliant tenant, so, if you're a landlord, it's in your interests to educate yourself on this new and highly complex scheme, This is especially so, where you're already heavily invested in this niche market. The RLA runs seminars on the topic in the different regions, so if you're interested infinding out more contact its Training Unit http://www.rla.org.uk/training

Mick Roberts

10:22 AM, 9th July 2019
About 2 weeks ago

I was just gonna say Bill and Sherrelle may come on here to explain as I only have 14 UC tenants so far, and none can leave me as Nottingham's http://www.selectivelicensingtruth.co.uk is making it nigh on impossible for Nottingham landlords to take Benefit tenants any more.

What u describe Bill and Sherrelle to me verges on illegal. DWP encouraging non payment for a period that the tenant is legally obliged to occupy.

And as u say, not what DWP predicted. Everything they predict, they seem to get wrong.

Rod

11:08 AM, 9th July 2019
About 2 weeks ago

These days the government or after money, make no mistake and this is simply another way to get it. Eg. gone are days of £60 fines - now it's £30,000 !!! So, keep your noses very clean as I see them rubbing their grubby little hands together ! The latest U.C. Scam is not out of the ministers pockets but the public purse, but that's perfectly OK !

Jayne M

11:48 AM, 9th July 2019
About 2 weeks ago

Reply to the comment left by CARIDON LANDLORD SOLUTIONS at 08/07/2019 - 23:48
It is another example of the stupidity that is Universal Credit, if a tenant as in the case of a friend is in receipt of the housing element of Universal Credit. The assessment date being the 19th (using your figures instead) and running to the 18th, payment date being the 25th. The tenancy end date is the 5th the calculations do not correspond to the actual liability that has arisen taking into account accruals, prepayments and the the date that they actually left (does not follow accountancy principles). It is simply where the tenant is on the assessment date, and are they entitled to the housing element? It is based on the whole month which is either paid or it's not, with no apportionment. If a tenant finishes a tenancy a day prior to the assessment date with no Alternative Payment Arrangement being in force and so Housing Element not being paid to the landlord. As in my friend's case going from Housing Element to no Housing Element the DWP would then class it as an overpayment of the Housing Element and if notified after payment date, they would then reclaim the money by a deduction from benefit and can issue a £50 civil penalty Because they have said they were notified of a change in circumstances after the payment date resulting in an overpayment. However the housing costs would have been the 1 month less 1 day the DWP would argue it was a months overpayment as no Housing Element should be paid. They would stop at the assessment despite the fact that housing costs continued to accrue after that date until the tenancy actually ended. The Housing Association would then chase the tenant for money which they were never given and do not have. Whilst the poor tenant is blamed for the arrears as any benefit claimant is obviously spendthrift and unable to budget. When the landlords are complaining about tenants on Universal Credit and arrears as you can see from the above situation it is often the DWP that is at fault. Now you have more APA's it is going to be more apparent that the fault is due to Universal Credit as many of the landlords have been blaming the tenants for simply not paying. The problem is often not that people on Universal Credit cannot budget but that the rules governing UC do not follow accountancy principles and have no basis in either reasonableness or logic. The first tenancy above would simply end officially on the 5th but would only be paid up to the 19th which precedes the tenancy end date and leaving outstanding rent relating to that tenancy from 19th to the 5th (17 days). As they use whole months, the tenant is at another property on the next assessment date if entitled to UC and Housing Element, they would receive a full month despite the tenancy not having been in operation for that long. The full stupidity of Universal Credit thus becomes apparent and there is no wonder that there are arrears and increased homelessness. The whole month rule is apparently for simplicity and cost however it is blatantly both stupid and wrong.

Seething Landlord

12:06 PM, 9th July 2019
About 2 weeks ago

Reply to the comment left by Bill irvine at 09/07/2019 - 10:13
I think you are absolutely right to describe this as a niche market. Those who are drawn into it unwittingly because an existing tenant becomes unemployed are going to be on a steep learning curve if they try to accommodate the new situation and adapt to it. The alternative would be to ignore the change in circumstances and take the view that it is still the responsibility of the tenant to pay the rent on time and in the event of default to take the usual steps to end the tenancy, at least for as long as the current system remains in place.

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