Posted by: Carl Brown
21/10/2011An effort to persuade the government to allow tenants to opt to have their housing benefit paid to their landlord predictably failed last night.
Lord Richard Best’s amendment, which was backed by 16 organisations including the National Housing Federation, failed to win government support.
One suspects this is more to do with politics and a point of principle than about logistics. The government is determined to make the experience of receiving benefit closely resemble that of being paid a wage, with claimants made more responsible for their finances. ‘The choices available to working households do not include opting for their employer to pay the landlord directly,’ Lord Freud said.
But this leaves the serious problem of what happens to those tenants who are in, or at risk of going in to, arrears with their rent.
Lord Freud has said that payment could be switched to landlords if tenants go into arrears and has announced demonstration projects to test the feasibility of this.
The minister has also said he is working with banks to look at the possibility of setting up ringfenced ‘escrow’ accounts to prevent banks from cancelling direct debits if the tenant has debts elsewhere, although it is not yet clear how effective these would be or exactly how they would work.
The multi-billion pound IT system that will enable claimants to monitor their universal credit payments will also have the potential for a budget calculator ‘app’ to educate tenants and prevent them from getting into arrears.
It seems as though the government is so determined to force claimants to manage their own finances it is considering complex mechanisms to protect landlords’ cashflows.
Would it not have been easier simply to support Lord Best’s amendment? Surely opting for your benefit to be paid to your landlord is an example of tenants making a responsible choice?
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Readers' comments (9)
Jono | 23/10/2011 12:54 pm
I think they should extend the model - income tax, NI and student loans - all paid for by the individual and not deducted at source.
Can't see that happening though.
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Jono | 23/10/2011 12:54 pm
I think they should extend the model - income tax, NI and student loans - all paid for by the individual and not deducted at source.
Can't see that happening though.
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Alpha One | 24/10/2011 11:48 am
Why should HB tenants get their rent paid directly?
They, like the rest of us, need to learn to budget properly and pay their rent when they are required to do so.
It's not hard, it's called Direct Debit or Standing Order, and if you bank account doesn't support that then, you need to make a note on a calender to pay your rent.
I accept there are some that can't pay their rent, but these people will have helpers to deal with this for them.
I also accept that some will find it difficult at first, but again, help can be provided for them.
However, saying that giving HB to tenants directly does not automatically imply arrears will follow. The people that think this clearly have a very dim view of the people they are trying to 'protect'.
Vulnerable people need protection, but just because you get benefits should not automatically mean you are incapable of paying your rent.
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Jack Davies | 24/10/2011 1:09 pm
Alpha One - The issue is not whether HB should be paid direct to landlords, it is whether tenants should have the choice for it to be paid directly. That is a very different issue.
Taking away that choice which is wht this has done will lead to increased rents.
Because of just the risk of added arrears, let alone the actual increase, rents will have to increase to reflect the additional provision for bad debt this removal of choice means.
Help or support if they cannot budget properly? Firstly that assumes funding is in place to do that which it isnt. Secondly, if the choice was there for tenants to have HB paid directly then there would be no need for this added cost would there?
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Jack Davies | 24/10/2011 1:10 pm
PS Jono - I gather your point abou income direct paid not through deduction at source was naive optimism or at best rhetorical. Yet if not the same increase in income tax rates would have to be put in place because of the added risk of non-payment.
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Susan Cowell | 24/10/2011 1:22 pm
I work with people who are vulnerable, on benefits etc. Many of them ask me to speak to the council about having their HB paid direct to the landlord.
Yes - a direct debit can be set up - but this puts many of my client into arrears with their landlord and incurring bank charges when for no apparent reason their benefit dosent go into the bank on time. Benefits being stopped without warning happens more than I had realised!
Plus - benefits paid o the tenant has put off many landlords taking HB claiments. Could they pay HB direct to landlord unless the client requests payment to themselves?
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Jack Davies | 24/10/2011 1:45 pm
Susan Cowell above you asked "Could they pay HB direct to landlord unless the client requests payment to themselves?"
No - that choice is also not being allowed
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amian amahar | 24/10/2011 7:01 pm
This whole discussion is another ridiculous offshoot of the 'nanny state' mentality. Tenants who are so vulnerable that they cannot manage to pay their routine bills should have identified representatives to help them with this. Perhaps in some cases they should not even be allocated independent accommodation. Everybody else needs to do what tenants have had to do ever since the practice of renting dwellings began i.e. pay their rent in person, on time and in full (by whatever means), or lose their right to inhabit the property. There may be circumstances which would occasion a normally responsible and solvent tenant to delay or default exceptionally (e.g. unexpectedly losing an income and having to apply for HB), and one would hope for some compassionate consideration to be given to this situation, but the notion that being a social housing tenant automatically = incompetence, fecklessness, rent arrears, and housing benefit spent on other items, is as ludicrous as it is insulting in respect of most tenants in HA or LA accommodation.
Similarly the job of an organisation set up to provide housing is just that - to provide decent, well-maintained homes in safe areas: not to become embroiled in Credit Unions, social care, entertainment, social networks, outings, football lessons etc.
There is, and always has been, great advantage to all in encouraging people accurately to identify, and then as efficiently as possible to meet, their own such needs, either as individuals, or as a group working together voluntarily and spontaneously.
In this country (unlike in many others) people are very fortunate to be able to access a benefit which provides money with which to pay their rents if they are unable to. Surely they can be expected at least to take responsibility for conveying that money to their landlord? Do we want to end up with a sub-culture of persons who also expect their food to be delivered free of charge to their tables, their clothing to be provided gratis to their doors, and so forth? I do not believe that most tenants would welcome the indignity of having their rent payments, or any other normal, human responsibility, taken out of their own control - especially given the apparently increasing size, and hence incompetence, of many HA finance departments and LA HB departments.
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steven holt | 25/10/2011 1:51 am
I have worked in Income Management for a HA for 15 years. The majority of my tenants who receive HB want it paid direct to the landlord. They should have the choice what they wish to do, for the government to say you cant have this choice is unbelieveable. It does not matter if you are in social housing or a homeowner the fact is that if you have extra monies in your bank account then the temptation/opportunity is there to spend it, if an individual wishes to remove that temptation then surely they should be allowed to do so, not to have the choice is wrong.
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