Tuesday, 30 September 2014

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.

Readers' comments (5)

  • Chris

    How unsurprising that allowing people to choose how they wish to pay their bills results in more of them being paid. The obsession in certain quarters to force all tenants to operate and fund the cost of banking that they do not wish has to be questioned as to who's interest is being followed.

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  • I wonder how they defined, identified and supported these "low-risk tenants".
    Also, one month's payments, and the exclusion of supposedly "medium or high risk tenants", does not a successful pilot make.

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  • 13% !!?!!?! This surely can't be correct?

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  • Tony Cook

    I agree, that figure of 13% can't possibly be right. In ye olde days of the Housing Corporation even a 5% figure could precipitate the threat of a Performance Audit visit.

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  • debtadvisor

    Oh what a surprise! Tenants who were unlikely to fall into rent arrears, have not fallen into rent arrears. Now lets see a demonstration of how to keep most of the medium or high risks tenants out of arrears. Shame on all these Housing Associations for participating in this Propoganda Exercise. Looks like shortsightedness and self-interests wins again.

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