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’.