9:45 AM, 2nd May 2013, About 8 years ago 3
The Residential Landlords Associated revealed yesterday the housing benefit element of Universal Credit may well be paid directly to landlords after all. However, a lot of questions remain unanswered.
According to the RLA “automatic direct payments to landlords will now be allowed in the pathfinder areas. The policy change was tucked away on the last page of an obscure circular published by the Department of Works and Pensions (DWP) yesterday.”
The circular states, “Landlords can refer rent arrears cases to Universal Credit; those which are under 2 months rent will trigger Universal Credit to contact the claimant to discuss their non payment as part of the Personal Budgeting Support process, where as those with over 2 months arrears will be switched to direct rent payment automatically and relevant budgeting support activity arranged subsequently.”
What we don’t know yet is whether existing arrears will be taken into account. For the most part, landlords receiving direct payments of LHA up to now have done so on the basis that their tenants are already at least two months in arrears on their rents. Will the new rules take this into account? It would seem logical and fair that they would be but nobody seems to be able to provide a definitive answer.
The news realeased by the RLA is generally being celebrated as good news as this may well prevent some of the expected havoc. Many landlords, charities and other organisations have expressed concern that a lot of benefits claimants do not have the required budgeting skills to deal with a single monthly payment of benefits. Given that direct payments are generally only made to landlords now on the basis that tenants are already two months in arrears is very clear evidence on this.
Charities were concerned that landlords might evict all benefits tenants on the basis that the risk for them would be too great.
So has the train wreck of Universal Credit we have all be expecting been averted? Only time will tell.
Link to RLA article HERE
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