MPs have urged the DWP to amend the benefits system so that it’s easier to make direct payments to landlords.

The work and pensions committee’s new report – Universal Credit: the wait for a first payment – recommends that the department should investigate whether landlords could tag a tenancy agreement to the claimant’s UC claim so tenants can get payments in line with their rent schedule, or if the benefit could be adapted to build in this flexibility.

The committee says allowing for more frequent payments would benefit the most vulnerable claimants and would have low-cost implications for the DWP.

It explains: “Alternative Payment Arrangements (APAs) offer a good option for claimants – the department must ensure that it is easy for all claimants to opt into twice-monthly payments so that strict criteria do not prevent more flexible payment options.”

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More recommendations

The report highlights the fact that most people with rent arrears in social housing put an APA in place so that the social landlord gets paid directly by the department, which usually leads to reduced rent arrears.

It also suggests paying the housing element of an advance payment directly to the landlord, because claimants sometimes use this to cover other essential living expenses, leaving them without enough to cover their rent.

The report explains: “This would ensure that claimants’ housing costs are covered during the wait for their first payment, and that they will not face the risk of falling into arrears or eviction as a result.”

It recommends renaming these ‘new claim loans’ to make it clear they need to be repaid.

The report adds: “The evidence shows that people on UC disproportionately experience problems. DWP must take these findings seriously and conduct or commission in-depth research to understand better the impact of the wait on rent arrears.”

Read the report in full.
Read more stories about APAs.

7 COMMENTS

  1. With a substantial track record, Assured Properties continues to offer landlords a reliable and consistent income underpinned by a professional service team, who specialise in the core areas of property management from maintenance and repairs to legal redress and time-consuming and costly administration and compliance processes

  2. Ah! The penny has finally started to drop! Maybe MPs and the DWP are finally starting to realise that the PRS needs paying and on time, and that some sort of guarantee of payment is needed before landlords will take on the unemployed and those who get government support for housing. It would be great if the whole amount of the rent/housing benefit (depending on circumstances) could be paid direct to the landlord without the tenant having the option to have it changed back to payment to tenant.
    Way back in 2009 the gov cut back the amount of HB it gave to tenants and they had to find the rest from their other income/benefits. This element must be taken into account when and if the gov decides to pay direct to the landlord. Example: in 2008 the LHA in my area, for a 5 bed was £256 per week, now it is £201 – the same as a 4 bed. In Dec 2009 a 3 bed was £127 pw and today it is only £137 pw, so over 11 years the amount of HB has increased by less than £1 a week. If the gov and groups like Shelter want better private housing for tenants then the amount of HB needs to increase to reflect this and to be paid direct to the landlord. If this happens there will be fewer problems with landlords accepting unemployed tenants and far fewer arrears.

  3. Regrettably, DWP’s hierarchy & our Secretary of State for W & Ps take a different view. They would prefer to restrict APAs even further in the PRS.

    The new online process of securing APAs is undoubtedly better than the predecessor system. However, DWP’s staff continue to make life difficult for landlords.

    For what it’s worth, what should happen when a landlord applies for an APA is:

    The application should be acknowledged and given an automatic reference number, which can be used in any follow-up enquiries; and

    If the basis of the landlord’s request is rent arrears, as soon as the application is received, the HCE should be suspended, pending a decision on the merits of the landlord’s request; (I note, this practice is now being adopted by DWP staff, which is entirely sensible and warmly welcomed. It’s just a pity they haven’t done this earlier as the hierarchy agreed to do this in 2015 exchanges with me.

    If the application is made in relation to a tenant with vulnerabilities (e.g. drugs or alcohol misuse; mental health; recent eviction for rent arrears etc) similarly, the HCE should be suspended pending a decision;

    Once a decision is made, the landlord should be notified and, in the event of refusal, be provided with an explanation, that, at the very least, allows him/her to discern the reason for refusal, without any question of DPA or GDPR being breached;

    Once an APA has been awarded, any application by the tenant to have this revised must demonstrate credible grounds for doing so. For example, if the tenant claims his rent arrears are now cleared, enquiry should be made of the landlord to satisfy the DM, the tenant’s request has merit. At the moment this is not happening. All too often, payment is redirected back to delinquent tenants, purely at the bequest of the tenant, with no grounds being offered or demanded by DWP’s staff (e.g. change in circumstances since APA was first agreed) only for the payment to be misused again.

    It would be mutually beneficial, if DWP could create a dedicated email and telephone line, which landlords could direct their enquiries to. The current arrangements are simply not working and are resulting in emails being sent to CRT, Service Managers & Neil Couling’s office, none of which helps anyone in the longer term. DWP’s ability to contact PRS landlords by phone or email is currently being underused, why, is not clear.

    If DWP addressed these failings in the current system it would greatly assist both tenants & landlords and would assist compliance with pre-action protocols.

    Bill Irvine

  4. Thank God I gave up on this Stone Age system 30 odd years ago!
    Oh my, shortly they will be allowed to bring their menageries with them as well!
    What a joy students have been !

  5. Until ‘clawback’ is removed as a possibility then direct payment is unviable.

    Payment of just the HB element is pointless ; that could be as little as £0.50.

    It must be for the full contractual rent paid first direct to LL with NO ‘clawback’ possibility.

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