Benefit reforms will lead to arrears
Government plans to stop tenants opting to have their housing benefit paid directly to their landlord could lead them to fall into arrears, a housing association has said.
Guinness Northern Counties said the move, contained in the proposals for a universal credit encompassing several benefits, would make it hard to identify people who were getting into debt because they were not receiving all the benefits to which they were entitled.
Under the proposals, which will receive their second reading in the House of Lords on 13 September, tenants will receive their housing benefit and be responsible for paying their rent.
Guinness Northern Counties found 100 tenants out of 3,000 with rent arrears over £80 were receiving less benefit than they should have been. It helped them claim a total of £317,000 in missing payments, an average of over £3,000 per person.
Carol Matthews, chief executive of Guinness Northern Counties, said: ‘What really concerns us now is that direct payments to tenants are predicted to cause a significant number of additional tenants to go into arrears, so in future those very people in greatest and most genuine need will become like a needle in a haystack to find and help.
‘We need to get this message across to government before these disastrous reforms become law.’
A Department for Work and Pensions spokesperson said: ‘Universal credit will simplify the benefit system, making it less open to error, which means that claimants will get the benefits they are due.
‘Under universal credit we want claimants to take responsibility for their own budgets, including paying rent, as they would if they were in work and in most cases housing benefit will be paid direct to tenants.
‘To ensure a smooth transition, we will be offering financial advice and support to those who need it.’ She added that vulnerable and older people can still have benefit paid to their landlord.
