Thursday, 24 April 2014

Income to be protected from welfare reform

Changes to welfare payments for housing costs will not damage the income streams of social landlords, the government has promised.

Today’s housing strategy states the universal credit welfare system that is replacing other forms of benefit will be constructed so it does not harm housing association finances.

Registered providers have raised concerns that plans to switch payments so they go direct to tenants rather than landlords would lead to an increase in arrears and make lenders more cautious about investing in the sector.

The paper notes there are advantages to paying benefits direct to tenants, but also states: ‘We will… design universal credit so that it contains safeguards to help protect social landlords’ income streams, and ensure that sufficient support mechanisms are in place for those who need help managing their finances.’

It adds that these safeguards are likely to include ‘tenant support’ and ‘mechanisms to switch payment back to landlords where necessary and arrangements to recoup any arrears’.

Readers' comments (2)

  • Rick Campbell

    The detail will be very interesting considering Chris Grayling says this ---

    Whilst I can appreciate the concerns of.. ..we believe that Universal Credit should, as far as possible, replicate a wage, so the way in which it is paid is of critical importance. We want to see very many more people handle their own benefit and rent payments. The Second Reading of the Welfare Reform Bill in the House of Lords on 13 September marked the next step in the legislative process. Last November’s Welfare Reform White Paper noted that there are advantages in paying the housing component to working-age tenants in the social rented sector, rather than the current system of payment direct to landlords. This would encourage people to manage their own budget in the same way as other households.
    Tenants of working age who are likely to run into financial difficulties managing their own rent will continue to have their housing support paid directly to their landlord. This will also be the case for current State Pension-age tenants.

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  • Sadly the Universal credit sounds like another benefit cut,as
    for example a claimant might get a one off weekly payment
    of say £100pw,whereas seperate payments of JSA/ HB / CTB
    might add up to £150pw.

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