Universal Credit can be a complicated topic for landlords, but fortunately our advice team is on hand to answer questions landlords may have on this topic.
Since its introduction. research for the RLA published this year shows that
over half of landlords (54%) with Universal Credit claiming tenants had experienced those tenants going into rent arrears in the past 12 months.
Some landlords tell us Universal Credit does not work as well for landlords as the Local Housing Allowance (LHA) that it replaced.
LHA allowed landlords to confidently arrange for direct payments of the rent from the outset of the tenancy. The local authority staff were generally faster in responding and happy to talk about a claim until the problem was resolved.
In contrast landlords report that with Universal Credit (UC) direct payments are difficult to arrange, with some landlords having to wait 2 months until they can make a claim to the DWP for direct payment.
It is no surprise then that landlords preferred the old system and would much prefer it if their tenants remained on LHA until the last possible transition date. Especially because the transition between the two types of benefit usually results in arrears developing due to the wait for processing and the end of the direct payment to the landlord.
Claims are only supposed to transition to UC when the tenant has a change in circumstances or the DWP informs them they have to. Unfortunately many Jobcentre staff have recommended tenants move over for no good reason.
The landlord who called this week was just such a case.
His tenant had been told to transition to UC at the Jobcentre. After following their advice, the tenant had quickly gone into arrears during the wait for Universal Credit payments to start. Once payments had arrived the tenant spent the money quickly and so soon found himself in 2 months of arrears.
The landlord was relatively understanding, wanting to keep the tenant as they had been in the property for 7 years. However, they struggled to find a way to make payments work.
Thanks in part to the RLA’s campaigning, when a tenant goes into 2 months arrears, the landlord is supposed to be highly likely to receive payments directly. This is a Tier 1 reason in the DWP’s terminology.
Unfortunately, many landlords struggle to make the request because of opaque, unhelpful systems and a phone line that refuses to talk to landlords.
The member called us for assistance and we advised him that direct payments were possible as long as he sent off the non-secure UC47 form but also that these things could unfortunately take time.
The member was happy to have somewhere he could at least apply to and thanked us for our assistance.