Scottish landlord successfully took payment from 400 tenants
Benefit pilot avoids arrears
A Scottish housing association claims to have so far avoided arrears in its universal credit direct payment pilot by not insisting on direct debits.
Dunedin Canmore, which with Edinburgh Council is piloting direct benefit payment to tenants in one of six 12-month projects in the UK, successfully took payment from an initial batch of 400 low-risk tenants in August.
‘We found that many people used the cash payment card as they prefer the physical process of handing stuff in.’
Graeme Russell, Dunedin Canmore
Graeme Russell, housing services director at the 5,000-home association, said this was because, unlike most other pilots, Dunedin Canmore had not relied on direct debits. Just three in 10 of its payments were made via direct debit, while around six in 10 payments were via cash payment cards or by online or telephone banking.
Mr Russell said: ‘We found that many people used the cash payment card as they prefer the physical process of handing stuff in.’ He added that, where direct debits were used, the association ensured benefit payments were paid into tenants’ bank accounts before the debits were taken out, avoiding problems encountered by other pilot projects.
In August Kevin Dodd, chief executive of Wakefield and District Housing, said in some cases banks took the payments to cover overdraft charges.
Mr Dodd this week said ‘not all rent due has been collected’. A WDH spokesperson said it couldn’t reveal figures because the Department for Work and Pensions had asked it not to.
Last month, Oxford Citizens Housing Association revealed that tenants on its pilot incurred bank charges due to a payment error.
However, in contrast, Family Mosaic said it is encouraging higher take-up of direct debit for its pilot because its tenants prefer paying that way. Half of the association’s 600 payments are made via direct debit.
Brendan Sarsfield, chief executive of the 20,000-home association, this week said arrears currently stand at 13 per cent.
The DWP has deterred landlords from talking publicly about their projects but will publish findings later this month.