Guest article: Supporting your Universal Credit claimants
18 Jul 2019 Agents   General   Landlords  

Guest article: Supporting your Universal Credit claimants

Universal Credit is a significant change to the benefit system, and the Department for Work and Pensions (DWP) have been working with Rent Smart Wales to help landlords understand what it means for them.

DWP are looking at ways to help make sure that housing costs are paid on time and in full – plans include developing a video that will cover the topics relevant to landlords. In the meantime, here is a quick rundown of the key aspects of Universal Credit for landlords.

What is Universal Credit?

Universal Credit is for people who are on a low income or out of work. It’s usually paid as a single monthly payment, and can include help towards housing costs.

It replaces six benefits, including Housing Benefit. Anyone already receiving these benefits will stay on them for now, unless they have a change of circumstances that means they need to claim Universal Credit instead.

Universal Credit is normally paid direct to claimants, and it’s their responsibility to pay their rent themselves. However, DWP can set up a managed payment to a landlord if your tenant:

  • is vulnerable
  • is in arrears with their rent for more than two months, or
  • has continually underpaid their rent over a period of time and arrears have reached the equivalent of one month’s rent or more.

This is an example of an Alternative Payment Arrangement (APA).

How much will claimants get towards housing?

Private sector tenants’ housing costs payments are based upon the lower amount out of their actual rent (including service charges) and the relevant Local Housing Allowance rate.

If their Universal Credit payment doesn’t cover all their housing costs, tenants may apply for extra local authority help through a Discretionary Housing Payment.

Universal Credit payments can change over time. For example, if a tenant starts work, their Universal Credit payment may be reduced as they earn more, and they may need to use some of their earnings to cover their housing costs.

Moving from Housing Benefit

If a tenant received Housing Benefit up to the date they applied for Universal Credit, their Housing Benefit will automatically continue for the first two weeks of their new Universal Credit claim. This doesn’t need to be repaid, and helps smooth the transition from Housing Benefit to Universal Credit.

Housing Benefit will usually automatically stop when the Universal Credit claim is approved.

Housing Benefit payments from local authorities direct to landlords will not be automatically put in place when someone moves onto Universal Credit, but managed payments to landlords can be considered if the tenant tells their work coach their Housing Benefit was paid direct to their landlord.

Helping claims go smoothly

Help your tenants make a new Universal Credit claim by ensuring they have accurate documents that prove their liability to pay rent and their occupancy of the property they’re claiming for. Missing or inaccurate evidence could delay their first payment.

Encouraging your tenants to open a bank, building society or credit union account will make sure they’re ready for their first Universal Credit payment, and allow them to arrange direct debits or standing orders for their rent.

Remind your tenant that if they can’t manage until their first payment they can apply for an advance. The maximum amount they can get will be the same as their first estimated Universal Credit monthly payment. They will need to pay this back from future Universal Credit payments, usually over 12 months.

Contacting DWP

If you need to contact DWP about your tenant, they will need to have provided DWP with their consent. They can do this through their online journal or by calling the Universal Credit Service Centre.

Consent only lasts until the specific enquiry is resolved or for a limited period of time, so your tenant may need to provide consent more than once.

If a managed payment to the landlord is in place, DWP can speak to the landlord about the payment without the need for consent, but consent will still be required for all other subjects.

Once consent has been provided, you can call the Universal Credit Service Centre on 0800 328 5644 or by using the Welsh language line on 0800 328 1744.

Click here for more information and advice for landlords about Universal Credit.