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DWP plan to withdraw landlord payments thwarted

Sally Walmsley
Written by Sally Walmsley

DWP plans to divert Universal Credit “Managed Payments to Landlords” (MPTLs) away from landlords have been defeated following intervention by Universal Credit expert Bill Irvine and the RLA.

The plan also affected Discretionary Housing Payments (DHPs) which are extra ‘top-up’ sums paid out to help benefit claimants who are struggling to pay their rent.

Mr Irvine took action after he discovered the Government department had issued a letter saying they should not be paid out in cases where housing costs were being paid directly to the landlord.

Here he explains how he helped to expose and later overturn the decision.

He said: “One of our Housing Association clients alerted me to a problem relating to the payment of Discretionary Housing Payments (DHPs).

Specifically, their local authority had stopped paying DHPs where its tenants had their “housing element” redirected to their landlord.

After some investigation, I discovered the problem could be traced to a letter issued to Local Authority Chief Executives by Universal Credit’s Programme Director in September, 2016. It read:

“Legislation states that in order to claim for DHP the rent liability needs to rest with the claimant /tenant.

“If there is a Managed Payment to Landlord (MPTL) in place the rent liability is being fulfilled by Universal Credit and not by the claimant.

“The MPTL needs to be removed for claimant to resume rental liability and claim DHP”…

“In these cases we will discuss this with the claimant and we will remove the MPTL if they request it…… This enables the claimant to apply for a DHP giving the claimant choice over how they spend their money.

“We will also prevent the landlord from reapplying for a MPTL so we can protect the claimant, although the claimant can ask for the MPTL to be reintroduced if they so wish.”

I wrote to DWP questioning the logic and legality of the proposed approach – Rent “liability” surely doesn’t alter when a MPTL is put in place?

The MPTL is generally implemented because the tenant is either vulnerable in some way, so may struggle to pay the rent themselves or has been (or could be, given the chance) delinquent, by not using the “housing element” to reduce or extinguish their rent liability and protect their tenancy.

Currently, in both Housing Benefit and Local Housing Allowance, DHPs are awarded and paid, alongside the HB/LHA award, directly to the landlord.

In my opinion, stopping the MPTL in this way will achieve nothing but problems and more work for all concerned.

Landlords are already angry and frustrated by the MPTL process, especially where non-secure e-mails are involved. This latest measure will further frustrate and impede landlord cash-flow, which is already causing great concern, and significantly increasing rent arrears. It could also lead to even further delinquency and misuse of public funds on the part of the tenant.”

In its response, DWP accepted its take on the “liability” issue was simply wrong. It also suggested that withdrawing MPTL would only be used “by exception” and only following discussion with the tenant and work-coach.

Since my exchanges, opposition to what was happening on the ground has been pursued by many of our clients, and in the past few days, DWP has responded to a PQ on the topic. Its response confirms it’s back-tracked from its original position:

“DWP does not see any reason why Discretionary Housing Payments cannot be paid to Universal Credit claimants who have Managed Payments to their Landlord in place.

However, if a Local Authority decides not to accept an application for DHP on the grounds that a managed payment to the landlord is in place, guidance is clear that DWP can, in agreement with the claimant, remove that arrangement to allow the application to be made.”

Mr Irvine has now advised landlords, agents and housing association’ to be aware of the issue so they can oppose any attempts by DWP or tenants to withdraw a MPTL, which he says is ‘a recipe for rent arrears and a serious threat to tenancy sustainment’.

If you require clarification on this or any other welfare reforms topic please get in touch with bill@ucadvice.co.uk.

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About the author

Sally Walmsley

Sally Walmsley

Sally Walmsley is the Communications Manager for the RLA and Editor of RPI magazine. With 16 years’ experience writing for regional and national newspapers and magazines she is responsible for producing articles for our Campaigns and News Centre, the weekly E-News newsletter and editorial content for our media partners.

She issues press releases promoting the work of the RLA and its policies and campaigns to the regional and national media and works alongside the marketing team on the association’s social media channels to build support for the RLA and its work.

2 Comments

  • Id like to say a HUGE thank you to Bill and his team for being on the ball at all times.
    Hes a massive asset to the RLA.
    Keep up the great work

  • Michelle

    Thanks for your very kind comments, but Richard Jones and the advice line staff, at RLA, play a big part in helping me challenge the vagaries of both the LHA and Universal Credit schemes. The RLA has definitely lead the fight when it comes to private sector landlords interests. Bill

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