Universal Credit overhaul will affect rent payments from April

If ever there was evidence that rent should be paid direct to landlords, this is it. Yet another rusty nail in the coffin for benefit tenants.

"A tenant discovered that £500 had been deducted from his benefits without consultation".

No sh*t.

Imagine how a landlord feels when they discover that a full month's rent has been deducted from their income without consultation.

Or the taxpayer, when their hard earned tax has been squandered by a benefit claimant without consultation.

In the old days we were able to call this fraud. Now we are being "unfair" to the tenant.
Agree with The Maluka - give housing benefit payments direct to landlord and stop all this unecessary bureaucracy. Shout it and shout it again.

As a landlord for over 30 years I have had many benefit claimant tenants.
On balance they have been as good as any other tenant but due to their low income, once they fall into arrears that are not usually able catch up.
Generally speaking, once they fall behind once,
they are more likely, to fall even further behind..
I do not take on benefits claimants these days unless they can prover us with solid guarantors.
Those on in works benefits are usually better but I will insist on a guarantor.
However, I believe that if the government wants us private landlords to take up the slack of the lack of social housing, they will get better results by guaranteeing the rent and paying directly to us landlords.
Hard to argue otherwise.

I think this ruling only applies to Council & Housing Association tenants.
Best to check on https://universalcreditadvice.com/

𝐀𝐥𝐬𝐨, 𝐭𝐡𝐞 𝐃𝐞𝐩𝐚𝐫𝐭𝐦𝐞𝐧𝐭 𝐟𝐨𝐫 𝐖𝐨𝐫𝐤 𝐚𝐧𝐝 𝐏𝐞𝐧𝐬𝐢𝐨𝐧𝐬 (𝐃𝐖𝐏) 𝐩𝐥𝐚𝐧𝐬 𝐭𝐨 𝐫𝐞𝐯𝐚𝐦𝐩 𝐭𝐡𝐞 𝐞𝐱𝐢𝐬𝐭𝐢𝐧𝐠 𝐟𝐫𝐚𝐦𝐞𝐰𝐨𝐫𝐤 𝐟𝐨𝐫 𝐚𝐮𝐭𝐨𝐦𝐚𝐭𝐢𝐜𝐚𝐥𝐥𝐲 𝐝𝐞𝐝𝐮𝐜𝐭𝐢𝐧𝐠 𝐨𝐟 𝐚𝐫𝐫𝐞𝐚𝐫𝐬 𝐚𝐧𝐝 𝐫𝐞𝐠𝐮𝐥𝐚𝐫 𝐫𝐞𝐧𝐭 𝐟𝐫𝐨𝐦 𝐭𝐞𝐧𝐚𝐧𝐭𝐬’ 𝐛𝐞𝐧𝐞𝐟𝐢𝐭𝐬 𝐟𝐨𝐥𝐥𝐨𝐰𝐢𝐧𝐠 𝐚 𝐜𝐨𝐮𝐫𝐭 𝐝𝐞𝐜𝐢𝐬𝐢𝐨𝐧 𝐛𝐫𝐚𝐧𝐝𝐢𝐧𝐠 𝐭𝐡𝐞 𝐩𝐫𝐚𝐜𝐭𝐢𝐜𝐞 𝐢𝐥𝐥𝐞𝐠𝐚𝐥.

The government could easily change the law so that the practice was legal.

Reply to the comment left by Mick Roberts at 11/03/2025 - 12:59
no I think it applies to all equally - private tenants who also claim benefits.

In fact it makes it more of a nightmare as the DWP don't even talk to private LL's as it is! If the DWP has to 'consult' with the tenant a private LL will never know, not be able to give their side of the story or have any idea of the outcome.

This is only going to increase the amount of tenants arrears in a quicker period of time if the amount of deductions that can be made are reduces further.

Is the flip side then the total arrears amount increases quicker so that you can issue (a new style S8) earlier?

I was just reading on another group multiple people had Council Tax arrears taken directly from their bank accounts - the deductions were so large they couldnt afford other bills. Guess this is legal then?

Reply to the comment left by Reluctant Landlord at 11/03/2025 - 16:42
Hi Reluctant

As Mick Roberts suggests, the Court of Appeal ruling applies to social landlords. The tenant, Mr Roberts, was a tenant of Guinness HA who disputed having any rent arrears and objected to the Association being able to "automatically" secure Direct Payment of his "housing costs" via the landlord "portal" (not available to private landlords) without consulting him beforehand.

So, his situation is quite distinct from Private-Sector cases, where it has always been the case that the tenant is alerted to his/her landlord's application for redirection and allowed 7 days to respond and, where appropriate, challenge the basis of the LL's application. However, DWP's Guidance suggests he/she must produce credible evidence to prevent redirection. In most cases, tenants can't, so payment is directed.

DWP is now planning to change the way social landlord cases are dealt with and is expected to align the social sector with current private-sector arrangements. So, it's the councils and housing associations that will be affected, mainly by experiencing a delay in the redirection process.

You might be surprised to hear Direct Payments only apply to between 5-7% of all private sector UC "housing cost" cases. Whereas in the social sector, the average figure is around 35%, again because of the "portal" facility.

Lastly, the reduction from 25% to 15% referred to will undoubtedly assist UC recipients with multiple debts. However, as "housing costs" are number 1 in the pecking order of third-party debts, landlords should continue to receive at least 10% of the 15% available.

The biggest problem with the Direct Payment scheme is, DWP treating Social Sector landlords more favourably than PRS. In many areas of England, especially from Manchester and further south, the scheme is nothing short of a lottery and has been for many years.

I sent an open letter to Mr Neil Couling, DWP's Director General in May 2017 highlighting many of its flaws and the horrendous rental loss experienced, especially by PRS landlords.

The situation hasn't improved. Landlords are still making applications, citing the appropriate Tier-1 factor e.g. 1.8 for 2 months rent arrears, and being refused with no explanation offered. Landlords don't have a dedicated telephone number or email to facilitate queries and are often told - "it's the tenant's account and you don't have his permission to contact us". The need for "Permission" was removed in Direct Payment cases in 2017 by no less than Neil Couling!

The NRLA, ARLA, etc. should be pursuing this scandalous situation.

Reply to the comment left by Bill irvine at 14/03/2025 - 11:44
When will private landlords realise that benefit tenants are very high risk.

Hi Maluka

All tenants pose a degree of risk. Benefit-dependent tenants can be especially difficult, mainly because DWP fails to apply the law and its internal guidance correctly. UC tenants can also be very good, loyal tenants, causing little or no trouble and keeping the property in a good order.

One of my longstanding clients who specialise in this area, has just sold part of their business for £100M plus, so it can be rewarding operating in this niche area as long as you're willing to put the extra effort in.