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.