A new online system allowing rent payments to be paid directly to landlords is being developed by the Department for Work and Pensions, following a lengthy campaign by the RLA.
The announcement was made by Work and Pensions Secretary Amber Rudd during a speech at a job centre in Kennington today.
Improving and speeding up the process by which payments can be made directly to the landlord has been a central part of the RLA’s work on Universal Credit. The RLA has been campaigning for the system to be online and has been working closely with the DWP.
Announcing the new online system Ms Rudd said:
“We need to make it easier for tenants in the private rented sector to find and keep a good home, and we need to give landlords greater certainty that their rent will be paid”.
“I have asked the Department to build an online system for private landlords, so they can request (where necessary) for their tenant’s rent to be paid directly to them. And I will consider what else we can do, because I am determined to help keep people in their homes”
Currently, landlords can apply for an Alternative Payment Arrangement (APA) which allow the housing element of Universal Credit to be paid directly to them. However, as RLA members that have applied through this system have reported – it is unreliable and inefficient. Private landlords currently have to use the UC47 form that is downloaded from GOV.UK and either posted or emailed back to the department.
Research by RLA PEARL [published in Autumn 2018, found that the average waiting time for an APA to be put in place was 9.3 weeks. This is often on top of the 2 months arrears needed to make the application for direct payment, resulting in escalating arrears and ultimately increasing the risk of eviction.
RLA welcomes new online system
Responding earlier to reports of the announcement, RLA Vice-Chair Chris Town said: “Our most recent research has shown that 61 per cent of landlords with tenants on Universal Credit have seen them go into rent arrears, up from 27 per cent in 2016.
“Improving, and speeding up, the process by which payments can be made directly to the landlord has been a central part of the RLA’s campaign on Universal Credit. Anything that helps this will give landlords much greater confidence in the system and ensure tenants have greater security in the knowledge that their rent payments will be met.”
Managed Migration and legacy benefits
On the subject of managed migration, Amber Rudd also confirmed today that the Government will press ahead with a pilot, to support 10,000 people from ‘legacy benefits’ on to Universal Credit in 2019, meaning a steady pace to the test and learn approach to Universal Credit and managed migration.
This is welcome news given the scale of the task in migrating eventually up to 3 million people in receipt of the 6 existing benefits such as child tax credits and working tax credits onto Universal Credit.
This scaled down migration will be part of a pilot scheme, which will begin in July 2019. The Government has confirmed that this will have no impact on the roll-out of Universal Credit, which will be fully rolled out by the end 2023 as previously set out.
Ms Rudd told a packed room that the transition ‘needs to be done well’, adding that lessons from the pilot scheme later this year will inform the DWP’s next steps.
Plans to migrate only 10,000 people from legacy benefits onto Universal Credit were also mentioned by Minister Justin Tomlinson MP when he addressed delegates at our Future Renting Wales conference last year.
At the conference, Mr Tomlinson told delegates that Universal Credit is the ‘single biggest transformation to welfare in a generation’, and he went on to praise the RLA’s campaigning work on welfare.
Extensive RLA campaigning on Universal Credit
It was in January last year that, following extensive campaigning by the RLA, DWP confirmed that landlords no longer need tenants’ consent when applying for Alternative Payment Arrangements (APAs). Until then, a landlord would need the ‘explicit consent’ of the tenant to do this. In practice, this meant tenants could delay or refuse consent, leading to substantial rent arrears being built up.
PRS landlord participation in DWP User Research – have your say
The RLA and DWP are working together to look at how processes such as APAs and direct payment to landlord can be improved as Universal Credit sees more and more tenants claiming the benefit. Without the members that have volunteered to take part in DWP User Research and the private beta testing of systems with DWP we wouldn’t be seeing the important changes that we are with today’s announcements.
We need to keep feeding in the experiences of our members into the Department and the offer to do this is still very much on the table from DWP, even if you are a landlord that has Housing benefit tenants who will eventually be moved across to Universal Credit and have no prior knowledge of the existing systems .
If you’re interested in volunteering, please contact Jude Eccles on JUDE.ECCLES@DWP.GSI.GOV.UK
This is especially important before the beginning of the managed migration of existing benefits to ensure the systems are working well and efficiently.
Other announcements relating to Universal Credit
Ms Rudd made other announcements on Universal Credit today, including:
- Pilot schemes to provide more frequent payments for new claimants
- The Government will not extend the two-child limit on Universal Credit for children born before April 2017, when the policy came into effect, benefiting around 15,000 families.
Learn more about Universal Credit
We are encouraging all our members to prepare for the eventual roll of managed migration as this transition does not just affect landlords with those tenants on traditional ‘out of work’ benefits, it will also bring in other benefits that tenants use to supplement their income. In order to prevent escalating rent arrears that may lead to eviction, knowing how the UC system works and how to escalate complaints and queries will be advantageous to both landlord and tenant.
- Watch the speech from Amber Rudd in full here
- The RLA runs classroom courses on Universal Credit for landlords. With dates coming up in London, Manchester, Leeds and Birmingham, book your place here.