North West

Landlords welcome direct payment announcement

RLA
Written by RLA

A Government move to allow automatic direct payments of housing benefit to landlords, has been welcomed by the Residential Landlords’ Association (RLA).

A Government move to allow automatic direct payments of housing benefit to landlords, has been welcomed by the Residential Landlords’ Association (RLA).

On the day the Government’s first flagship universal credit pilot scheme went live in Ashton-under-Lyne, a circular to all housing benefit staff revealed that automatic direct payments to landlords will now be allowed in the pathfinder areas.

The policy change was tucked away on the last page of an obscure circular published by the Department of Works and Pensions (DWP) yesterday. Universal credit expert and RLA trainer, Bill Irvine, spotted it and immediately informed the RLA.

The circular states, “Landlords can refer rent arrears cases to Universal Credit; those which are under 2 months rent will trigger Universal Credit to contact the claimant to discuss their non payment as part of the Personal Budgeting Support process, where as those with over 2 months arrears will be switched to direct rent payment automatically and relevant budgeting support activity arranged subsequently.”

The news that direct benefit payments to landlords will now be triggered automatically following two months of arrears represents a welcome change in policy by the Government, which had previously insisted that direct payments to landlords would only be allowed in exceptional circumstances and even then not automatically.

Richard Jones, policy director of the RLA, commented, “The RLA welcomes this new guidance to DWP staff, which represents a significant step-change in attitude by Government; and, for the first time publicly acknowledges that direct payments to landlords are a crucial component of any welfare reform process.

“However, Government promises of automatic direct payments do not yet extend to the national roll-out of universal credit later this year, and we are eager to ensure that it will apply when this happens. At the same time, the RLA will continue lobbying for a shorter time period in which automatic payments can be triggered, and for more details about the direct payments process. It is important for landlords to know that if tenants fall into arrears an immediate stop will placed on further payment of housing costs to the tenant until direct payments to the landlord have been established.

“We are very grateful to Bill Irvine for bringing this to our attention, and look forward to working with him on future RLA housing benefit policy work.”

Further information

Read the DWP circular ‘HB A13/2013’. The reference to universal credit payments can be found on page 16.

About the author

RLA

RLA

The Residential Landlords Association (RLA) represents the interests of landlords in the private rented sector (PRS) across England and Wales. With over 23,000 subscribing members, and an additional 16,000 registered guests who engage regularly with the association, we are the leading voice of private landlords. Combined, they manage almost half a million properties.

12 Comments

  • Many thanks for the interesting article.
    Very useful as a landlord!
    We’re concentrating on higher-end HMOs, with professional people as tenants, but redundancy can happen to many so, it’s as well to be in the know re those claiming benefits I guess.

    Regards,

    Vinden Grace
    Property Sales Coach

  • A great sign that landlords are winning the arguement. I am now more convinced than ever that when social landlords start to feel the pinch, tenant choice, at the very least, will be introduced, and to be credible this would have to be for social and private tenants.

    Also as a tax payer, I think that tenants who reieve LHA and don’t hand it over should be treated as overpaid and be forced to repay the state. This would make rent collection alot easier as there would be no incentive for tenant to keep it.

  • When the Universal Credit system is rolled out to he rest of the country , will the Welsh Councils abide by these changes as todate I have found them to operate a different set of rules to those in England.

  • I agree with PHIL MCKUHEN, one of our tenant took the LHA for 3 months (900 x3). As soon she realise we are going to have LHA paid direct to us. She left moved to different property in different Borough. We lost rent and tax payer lost money too

  • Still not good enough. This is as good as the government saying landlords should give all tenants two months rent free out of every six tenancy agreement. We’ll all go out of business very quickly if that carries on.
    We must go back to direct payments from day one. That would show good budgeti ng sense on behalf of the tenant.

    • Tenants receiving housing benefits from the local council already believe that they can keep the first 8 weeks. I have been told by a tenant that it is legal to keep it because the council won’t pay direct to the landlord unless arrears are more than 8 weeks and eviction cannot begin unless the arrears are more than 8 weeks, this tenant believed this to be their right and entitlement.

  • Furthermore, every tenant that vacates owing LHA rent to their landlord should be reported for fraud and the landlord should insist on an investigation and prosecution.

  • Dear Bill,

    Thank you very much for bringing this to our attention. At the moment many landlords are worried about taking on or keeping current benefit claimants. This goes a long way to bringing us some peace of mind.

    Keep up the good work.
    Regards
    Cherryl

  • It is crazy to have to give two months notice, then go through the eviction road taking weeks to evict a tenant who knows the system. I have had a tenant who has moved from borough to borough claiming and never paying the rent she has received.
    I have reported this to our council. This is tax payers money.

  • As a Conservative Councillor and long standing landlord I am appalled that the debate regarding payment of Housing Benefit direct to tenants, instead of the universally favoured option of direct the landlord, is even taking place.

    Before the last election, as Shadow Housing Minister, Mr Shapps, now Conservative Chairman confirmed

    “the current system, where local housing allowance is paid to tenants and they use it to pay their rent, had led landlords to refuse to rent to people on benefits. Previously councils paid housing benefit direct to claimants’ landlords.

    The current situation is bad for everyone, and I can see no reason why people on local housing allowance shouldn’t enjoy the freedom to have their housing benefit paid direct to their landlord”.

    Shadow Work and Pensions Minister, Andrew Selous added:

    “We believe that tenants should have the choice of where their rent money is paid to, especially if it makes the difference between a property being available to them or not.
    The (Labour) government are blind to the problems that low income tenants are facing and should restore this choice to tenants now”.

    Try as I may to seek clarification from Ministers regarding this broken election promise, every response to date has been focused around generic welfare reform gibberish.

    Sorry, but as a Conservative Councillor I am disgusted at my Government’s Agenda; a Government which needs to listen to people who know what is happening, rather than those that think they do.

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