The Government’s decision to take action to make the Universal Credit system work more effectively for landlords and tenants alike has been welcomed by the RLA. Here, Bill Irvine, the RLA’s Universal Credit adviser and trainer looks at the implications of the changes and the timescales involved.
“Following the Chancellor’s autumn statement, his colleague, David Gauke, Secretary of State for Work & Pensions, made a statement which provides some degree of clarity to what the Government is planning to introduce and the timetable associated with the new measures.
DWP has, only slightly, amended its planned roll-out timetable, by extending the first phase of the Full Service (UCFS) target to December 2018. DWP maitains however, this slow-down won’t impact on the planned completion date of March 2022. You can check if you’re affected here.
7 Day “Eligibility” Waiting Period
As had been hinted in the run-up to the statement, he announced that from February 2018 the seven-day “eligibility” waiting period will be removed, reducing the length of time some claimants might wait to receive their first full payment.
The move will be welcomed by those claimants who would otherwise be affected. In their case, the wait is indeed reduced from six to five weeks.
However, for “legacy benefit” claimants, this new measure should have no impact as their wait should always have been, no more than five weeks, although in practice, especially in Full Service areas, the wait for actual payment to be made can take anything between 6-12 weeks. You can read more about this in one of my member bulletins.
Housing Benefit Run-on
From April 2018, new Universal Credit claimants, who, at the point of claim, are already receiving support towards their housing costs, will be provided with an additional payment of two weeks housing benefit to assist “their transition to Universal Credit, helping to address the issue of rent arrears for those who most need it”.
Probably, few if any, commentators expected anything like this. However, I’m not surprised.
Despite Mr Gauke’s comments, I suspect the move was instigated to end the scandalous situation, which currently exists, whereby overlaps in housing benefit, created during the first benefit assessment period (BAP) of Universal Credit, are treated as overpayments, and are recovered by treating the overpaid sum as “income” and clawed-back, in one lump sum, from the initial award of Universal Credit.
This little-known practice, leaves many claimants, already under financial pressure, hundreds of pounds out-of-pocket, completely bewildered and helpless.
When this first came to my notice around three years ago, I raised the question of its legality with DWP.
In response, I was directed to a little known Statutory Instrument which facilitated this practice.
Rather than wait another six months, DWP should terminate the practice immediately as it would help relieve the financial pressure on tenants and landlords alike.
“Housing Element” of Universal Paid Direct to Private Sector Landlords
Private sector landlords will warmly welcome the news that DWP is planning to issue new guidance in December 2017 permitting payment of the “Housing Element” direct to landlords who were accustomed to receiving LHA “safeguarded payments” for tenants.
The RLA, Property Tribes, Landlordzone, Caridon LS, and many other PRS organisations, have led the fight on this for the past five years, and it must be very satisfying to see all their efforts coming to fruition.
The move makes perfect sense, is long overdue and will hopefully stem the tide of PRS landlords refusing to provide accommodation to tenants receiving Universal Credit.
Mr Gauke explained the reasons for the move: “Since the reforms in 2008, most tenants in the private rented sector receive their housing benefit directly, rather than the benefit going to landlords, but about 30% of tenants have alternative payment arrangements in which the money goes directly to the landlord.
“Once we change the guidance, the presumption will be that such alternative payment arrangements will continue and that the money will therefore go to the landlord, rather than to the tenant.
“We are constantly considering ways in which we can ensure there is support, and let us not forget that housing benefit transitional payments will provide two weeks of support—the payments are not recovered, they are additional support—to help people as they migrate on to universal credit.”
From January 2018, claimants will be able to access up to 100% of their estimated Universal Credit entitlement in the form of an advanced payment (loan) which includes the housing costs, instead of the 50% at present.
Secondly, the period of repayment has been extended to 12 months which will relieve some of the financial pressure currently being experienced, especially where claimants have “Third Party deductions” as well.
In addition, from spring next year, claimants will be able to apply for an advance online, with payment being expected within five days.
Again, from April 2018, DWP intends to alter the way claimants in temporary accommodation receive support for their housing costs.
The statement doesn’t explain how this will be achieved, but I anticipate the “housing element” currently the responsibility of DWP, will be transferred back to local authorities to administer through Housing Benefit. Another entirely sensible move.
Look out for more details from DWP in the coming months in the form of one of its HB circulars. Once available I’ll write to update members.
Lastly, Mr Gauke is meeting today with CAB’s Chief Executive to explore the possibility of greater “collaboration” with a view to “help claimants locally as they move to Universal Credit”.
As the move to UCFS expands, the numbers of claimants will vastly increase from 650,000 to around 12 million.
Claims will increasingly be made digitally and with limited scope for backdating its vitally important claims are made timeously and effectively.
Demand for advice and support will never be greater. So, whilst the move to engage CAB is welcomed, I would suggest Mr Gauke should also look to invest, in similar fashion with Housing Associations as it’s to them many tenants look for assistance.”
If you require any further advice on this or any other welfare issue you can contact Bill Irvine DIRECTLY by email or by calling 07733 080389.
The RLA runs Universal Credit courses, which will be updated to reflect the new changes. For more information and to book click here.