Universal Credit / HB monies paid direct to tenants

by Readers Question

11:54 AM, 6th November 2014
About 6 years ago

Universal Credit / HB monies paid direct to tenants

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Universal Credit / HB monies paid direct to tenants

With an eye on the imminent introduction of Universal Credit, the recent a recent discussion – “Is your MP a Landlords champion” – kicked up some interesting points, one of which was the potential loss of tax revenues as a result of Tenants who, instead of passing the housing benefit payments on to their Landlord decide to keep it for their own personal usage. As with several of the respondents I had never considered this facet but was left wondering just how much could be involved. Universal Credit HB monies paid direct to tenants

If one puts any actual figures against such aspects as the number of claimants, the percentage likely to retain the HB money etc, Ministers – and/or their advisers – would undoubtedly dispute these, therefore in order to get a feel as to the possible effects consider the following.

If, for every 1 million claimants, 1% kept the HB money, for every £100-00 rental figure per calendar month the loss to Landlords will be £1 million with a corresponding potential loss in taxes – based on 20% of £200,000 per calendar month.

Assuming I have not made any fundamental error in the above, if one puts some multipliers on the above base figures then we may obtain some vision as to the potential total loss in tax.

Assume, 10 million claimants still allowing 1% who retain the HB monies and an average rent of £400-00 per calendar month – it may be low for some but I am assuming lesser advantaged areas, then the loss in taxation would equate to £8 million in one calendar month.

Given that such monies will be lost in to the black economy one has to question the rationale of paying HB monies direct to Tenants.

It is a fact that many tenants categorically state that they would rather the HB monies be paid direct to their Landlord, similarly many Landlords would prefer such monies to be paid direct to them. This not only has a financial benefit but also, should there be a “problem” with the claimants entitlement etc the Landlord is made aware of this direct from the Council and is able to contact the Tenant to ensure that he/she is providing the necessary information that is required to resolve the problem.

Who knows what the scenario will be when Universal Credit is rolled out to the whole country.

Regards

Don Higgs


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Comments

Arran Pritchard

11:01 AM, 8th November 2014
About 6 years ago

Gross rent is made up of Nett Rent + Service Charges.

- Nett Rent is paid by HB ( Housing Benenfit )
- Service Charges are paid by IS ( Income Support Jobcentre - DWP ).

HB paid to landlord is mandatory at 8 weeks arrears. It is discretionary before 8 weeks, If the LA sees the tenant is falling into arrears before 8 weeks, normally it is in the tenants best interest, to stop arrears accruing as soon as possible. If the tenant is deliberately not handing over the Housing Benefit payments, the LA will pay it to the landlord before 8 weeks. It is upto the landlord to supply to the LA on a weekly basis the tenants rent schedule, the LA can then see conduct of the tenants account.

Service Charges - DWP will make deduction from IS at 4 weeks gross rent to cover:
- the ongoing service charge and stop arrears accruing further
- pay £3.65 to bring down the accrued rent/service charge arrears.

From what I've read of the Universal Credit, it is much the same.

Regards
Arran.

All BankersAreBarstewards Smith

21:21 PM, 10th November 2014
About 6 years ago

Reply to the comment left by "Steve Gracey" at "07/11/2014 - 10:34":

Steve you say - "This isn’t intended to be anti immigration" - well you could have fooled me....

you mention "immigrants" 7 times in your short bigoted and ill informed comment. Scapegoating a disparate group of people who come from diverse ethnic, educational, racial, and religious cultures just shows the small mindedness with which you group together people who you do not understand.

I have just watched a period drama in which the rivers of blood speech was quoted.... there were bigots then and clearly there are still bigots now spout the same old inflammatory nonsense.

Mark Alexander

22:20 PM, 10th November 2014
About 6 years ago

Reply to the comment left by "All BankersAreBarstewards Smith" at "10/11/2014 - 21:21":

It isn't clear to me whether Steve is more upset with immigration or the benefits system.
.

Robert Mellors

23:59 PM, 26th November 2014
About 6 years ago

Just spotted this post, after watching Benefits Britain on Channel 5 this evening, and what great timing it was as the tenants on Benefits Britain were very typical of many (but definitely not all) LHA tenants. On the programme it was all about council tenants and bedroom tax, but the attitude of the tenants was typical of tenants in private rented housing:

There was a bloke who spent his time drinking cider and watching TV all day everyday, and prioritised buying his cider over paying his rent.

There was a woman who thought her home was haunted, but instead of using her benefits to pay her rent so she could then be considered for a transfer (or even move out and get a private rented flat), she decided to spend her benefits on treating herself to a new tattoo.

There was a couple who refused to use their benefits to pay their rent top up out of principle, and they refused to allow their family to pay the rent for them, so instead they decided to let the council evict them from a home where they had lived for 35 years.

Every person featured on the programme had at least one dog and seemed to be able to afford to buy them and feed them etc, while not paying their rent. I've nothing against dogs, but surely keeping your home is more important than buying a staffie!!!

All of the people featured on the programme blamed other people (the government, the council, etc) for their position. Not a single person accepted or even considered that they could make lifestyle changes that would enable them to pay their rent.

It's so stupid because every one of those people had the ability to pay their rent, even with the bedroom tax imposed, but they were unwilling to accept the responsibility of doing so, choosing to spend their money on booze, fags, dogs, tattoos, etc, instead. Why not change their habits and keep their home? Why not take in a lodger? Why not get a job (or start self-employment)? - Don't get me wrong, I know how difficult it is to live on benefits, but there are choices that people can make to change their situation for the better.

The same principles apply to benefit caps under Universal Credit, people can be exempt from the benefit cap if they can be bothered to take the right action, and this will help to protect their home and their future.

It is sheer madness to pay the HB/LHA element of UC direct to tenants, it will be a disaster, but as I have stated in other posts and Arran has mentioned above, landlords do have the option of applying for the HB/LHA to be paid direct to them if the tenant has rent arrears (and also for service charges). AND one good thing about UC is that the amount that the DWP can pay to landlords as a direct deduction from the tenant's benefits to pay off rent arrears is predicted to increase from 5% (£3.65 pw) to up to 20% so that rent arrears can be paid off quicker. - There is a separate post about this that gives loads of detail of how to get these payments.

Robert Mellors

0:05 AM, 27th November 2014
About 6 years ago

Reply to the comment left by "Mick Roberts" at "06/11/2014 - 14:56":

Pay as you go meters for gas and electricity, mmmmmm, wouldn't it be great if we could have pay as you go meters for accessing the rented property?!! Tenant has to clear the debt on the meter before they can gain access......... now there's an idea. - It would probably the most effective way to get some of them to pay the rent if/when Universal Credit starts paying it to them instead of to the landlord.

Steve Gracey

0:45 AM, 28th November 2014
About 6 years ago

Whoah there AllBankers,

You are right - because I dared to discus Immigration I am of course a small minded inflammatory bigot.

The previous post to mine said ...”The only way to get HB claimants out of bed is to make the differential twixt wages (increase) & benefits (decrease) to a point where it IS worth working”

I agreed with this and then attempted (maybe not very well) to illustrate that if these claimants got out of bed and took a job then we wouldn’t need 3 million immigrants to do the jobs that they won't do and then we wouldn’t have all this pressure on housing etc.

Here’s another quote from someone else who also has small minded inflammatory bigoted views just the same as me ....”low skilled immigration is too high”. http://www.telegraph.co.uk/news/politics/labour/9911983/Ed-Miliband-says-low-skilled-immigration-is-too-high.html Yes, Ed Miliband is also quite clearly a small minded bigot just like the entire population of Rochester who dared to democratically elect a UKIP MP, and of course the whole of Australia because they have dared to democratically choose to have a CONTROLLED immigration policy. You have a different point of view and your view must be right because you read the Guardian and can make clever wordplays about bankers. You are clearly much more intelligent than me or Ed or Australia and therefore you must not discuss anything to do with the dreaded I word without resorting to insults.

Grow up and play nicely – lots of people are concerned about immigration, it puts pressure on house prices and rents via supply and demand (ever heard of that?) and quite possibly puts more people onto benefits such as UC so I think it’s relevant to discuss on a property portal. Its a big issue for all the parties at the moment, if everyone is discussing it apart from you then who is the small minded bigot?

Mark – you are right, it’s both our benefits system and immigration policy that annoys me. But I think it is primarily the current benefits system which has low skilled people choosing not to work necessitating their replacement by immigrant labour creating a viscous circle sucking in even more cheaper immigrant labour. That’s just my humble opinion but I am merely a small minded bigot making even more inflammatory comments.

Allbankers - I think you should look up the definition of small minded and then consider your rude and dismissive response to me.

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