THOUSANDS of households could be left at risk of falling into debt with their landlords due to a major benefits shake-up.
Those claiming housing benefit will be asked to move to Universal Credit as part of the Department for Work and Pensions (DWP) managed migration scheme.
1
Over two million people are still on old-style legacy benefits, but the government plans to move the majority of them onto Universal Credit by the end of 2024.
Over half a million households claiming tax credit have already received managed migration notices to make the switch, and those on housing benefit will too.
But they will no longer have their rents paid automatically to their landlord.
Instead, the housing element of Universal Credit is paid directly into bank accounts once a month along with the rest of their payment.
It is then the responsibility of the tenant to pay their landlord.
Now experts are warning that some could find it difficult to pay on time and may end up with rent arrears.
Some people on housing benefit have already moved from housing benefit to Universal Credit because of a change in circumstance, or out of choice.
A report by the Child Poverty Action Group today found that some of those who have already moved have fallen into debt because of the change in payments.
Most read in Money
The report said: “Claimants moving from housing benefit to Universal Credit through natural migration (where they move because their circumstances have changed) often fall into rent arrears as they adjust to the system of using their monthly benefit payment towards their rent.”
The charity has warned the DWP that it’s “crucial” that all housing benefit claimants due to move to Universal Credit through managed migration are made aware that the housing element isn’t paid directly to their landlord as rent.
It warned those in serious debt or with a mental health condition are at risk too, and that anyone moving over should be told that they can ask for the money to be paid automatically to landlords, instead of getting the payment directly.
In response to the findings, a Department for Work and Pensions spokesperson told The Sun: “Those on housing benefit who move to Universal Credit receive an additional two weeks housing benefit when they start their claim, helping to prevent rent arrears as they adapt to the new monthly payment cycle.
“Universal Credit mirrors the way wages are paid, with people receiving monthly payments to help them take ownership of their own budget.
“For those who need additional support, safeguards such as direct payments to landlords are available and claimants should speak to their work coaches if they have any concerns.”
Who can get their Universal Credit housing element paid directly to landlords?
If you or a landlord are worried that you cannot manage the single monthly Universal Credit payment and there is a risk of financial harm to the claimant you may qualify for an alternative payment arrangement (APA).
APA may be considered at any point during the Universal Credit claim. They may be identified at the outset by a work coach, or case manager, or at any time during the claim.
They can also be triggered by information received from the claimant, their representative or their landlord.
The DWP recognises that some claimants will need extra support in managing their bills.
Therefore, in some cases, a managed payment to landlord (MPTL) might be appropriate.
An MPTL can be made when:
- A claimant is in arrears with their rent for an amount equal to, or more than, two months of their rent
- A claimant has continually underpaid their rent over more than two months, and they have accrued arrears of an amount equal to or more than one month’s rent
- A claimant was previously in receipt of housing benefit and it was paid to their landlord
They can also qualify if they have:
- Drug/alcohol or other addictions such as gambling
- Learning difficulties
- Severe and multiple debt problems
- Live in temporary accommodation
- Been a victim of domestic violence and abuse
- Have a mental health condition
- A family with multiple and complex needs
Who can request a managed payment to landlord?
Either the claimant or their landlord can make the request for MPTL.
If the claimant is making the request, this can either be:
- Via their journal on their online Universal Credit account
- During their meetings with their work coach or case manager
- By phoning Universal Credit on 0800 328 5644
Following a request for a MPTL a decision will be made whether or not a managed payment is appropriate and both the landlord and claimant will be informed of the decision.
