Saturday, 01 November 2014

Landlords to get benefits of tenants in arrears

Payment of benefit will be switched back to social landlords when tenants accrue two months of arrears during universal credit ‘pathfinders’.

Universal credit, which combines a number of benefits into one monthly payment to households, came into effect for new claimants in Ashton-under-Lyne near Manchester on Monday as part of a pathfinder project. Three further pathfinders in Wigan, Warrington and Oldham will start in July ahead of a national roll out of the scheme from October.

A circular published by the Department for Work and Pensions on Monday reveals claimants on the pathfinders with two months of arrears will have the housing costs element of their payments switched automatically to the landlord.

A spokesperson for the DWP said the decision to have an eight week ‘switchback’ period on the pathfinders was taken because that is the equivalent practice in the private rented sector. He added a two month switchback would not necessarily be used when universal credit is rolled out nationally.

He said: ‘This should not be seen as an indication of how direct payment will work under universal credit.’

Year-long demonstration projects are currently taking place across the country to test direct payment to tenants, including different options for switching benefit to landlords.

Readers' comments (35)

  • SER YEK

    Of well!!!

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  • Is this meant to imply that the whole UC payment will be switched to SRS landlord?

    That would mean no cash going to tenant for at least 3 months after switch.

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  • I think the decision to have an eight week ‘switchback’ period on the pathfinders was taken because the DWP don’t want every one knowing how many people will get into arrears when universal credit is rolled out nationally. Or am I just being cynical.

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  • Joe Halewood

    So this only applies to the pathfinder or pilot areas and is not (excuse the pun) universal?

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  • Has anyone considered making reasonable adjustments for people with
    Bi polar. One symptom being unreasonable and compulsive spending so having all benefit money paid in one account once a month could lead to disaster. I have not heard about this anywhere.

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  • Ian you are spot on chap

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  • The con dems are imposing £24 billion of benefit cuts
    onto the poorest people in the uk ,and many of these are repeated
    annually , to thereby take away tens of billion of vital and legal
    incomes from these people in the near future ........and the condems
    are then completely changing the system of paying benefits , by
    introducing the UC , which abolishes 6 previous benefit rights and
    then only pays the entitlement at the end of a 4 week period.
    For example , social landlords want their rent paid
    weekly in advance and do not allow any 4 week waiting period.....
    are they now going to rewrite / resign their tenancy agreements ?

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  • Ernie Gray

    We are replacing rent direct with a new system, deferred rent direct the new system that guarantees instant bad debt. The penny is starting to drop although it is still stuck in the slot.

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  • What will happen to housing benefit staff working inside
    local authorities...are they going to continue to assist the
    DWP regarding benefit claims / rent payments and in regard to
    rent increases ? or
    How will civil servants know how much the rent is for
    each claimant ?

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  • Kevin.J.McCain

    Just 8 weeks in arrears you can use the good old section 8 eviction. Drop in a new credit checked tenant at a rent they can afford with a time limited tenancy. Within a few months a landlords bottom line will be looking just fine.

    Just need to knock up some camps to concentrate vagabond families in.

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