Sunday, 01 March 2015

Rent arrears to go up '£180' under universal credit

Universal credit will lead to an average increase in rent arrears of £180 for each tenant, according to law firm Winckworth Sherwood.

A major shake-up of the benefits system began yesterday with a pilot involving new claimants in Ashton-under-Lyne in Greater Manchester.  Universal credit will merge several benefits and tax credits, including housing benefit, into one monthly payment.

But analysis of a separate universal credit pilot by Winckworth Sherwood found that the move to one monthly payment will see a significant increase in rent arrears as tenants in social housing struggle to adjust.

The firm found that a pilot involving around 2,000 tenants in the London borough of Southwark earlier this year showed tenants who started the pilot with no rent arrears found themselves on average £180 in debt at the end of the pilot.

The pilot involved 1,500 local authority tenants and 500 tenants of Family Mosaic housing association. It found only 60 per cent of tenants successfully moved onto the pilot, with 40 per cent failing to successfully manage their monthly budgets. Of those involved, 11 per cent refused or were unable to engage with the local authority and 14 per cent were later deemed too vulnerable to take part.

Nikki Lynds-Xavier, a partner in Winckworth Sherwood’s housing management team, said that these findings were ‘worrying for housing associations’.

‘Further small-scale pilots have shown that under the new benefits system, housing officers have to make upwards of 40 visits in each case when chasing rent arrears, compared against six under the current system. This adds an enormous administrative burden and cost for those providing social housing,’ she added.

Readers' comments (24)

  • michael barratt

    In many instances it is not just about tenants managing their money, it is about tenants attempting to manage drastic cuts in the money they now receive.. A cynical Condem Government will claim tenants are mismanaging the money they receive and direct attention away from the swinging cuts they have made in bendefits.

    Unsuitable or offensive? Report this comment

  • And so it begins, a problem that will plunge many into instant arrears when they migrate to UC,

    Unsuitable or offensive? Report this comment

  • And so it begins, as Robert says, it will plunge people into poverty not just housing areas.
    It is already telling on so many. Food banks are being set up all over the place.
    These are being used not just by social housing tenants but people in work and private rents and with mortgages are equally struggling. What an amazing job this government is doing for our country and its people.

    Unsuitable or offensive? Report this comment

  • It seems as though the gov want people to fail,surely the most common sense way to go about this is to give people the choice as to how their rent is paid.
    The reason given is to make people manage their money as if they were working and receiving a wage,but surely if you are working and receiving a wage you get to choose how rent and other essentials are paid.

    Unsuitable or offensive? Report this comment

  • As someone on ESA fighting to get support group ESA and my DLA I shall go into an immediate month of arrears, they are telling us we need to "Save" towards making sure we do not go into arrears, HOW? When we barely get enough to live on as it is, I have no money spare by the end of the current fortnight let alone at the end of six weeks when I get the month in arrears they are intending us to get by on, after the final two week payment I worked it out I will have six weeks to go before I get the first monthly pittance, it is going to be hard enough to get by on two weeks money as it is without going into debt with a local loan shark or one of these legal loan shark companies with thousands of percent fees and interest payments, another way of freeing up housing stock as all it takes in many associations or councils is THREE WEEKS in arrears to be served an eviction notice, way to go New Nazi Party.

    Unsuitable or offensive? Report this comment

  • Melvin Bone

    I'd imagine they are behind with Council Tax as well...

    Less of the Nazi jibes Michael. To point the Nazi finger disrespects quite a few people. And besides the Tories have no plans to invade Poland...

    Unsuitable or offensive? Report this comment

  • simon ryan

    here we go again guys and girls , a nostalgic trip back to the 70's and 80's when they decided this system wouldnt work then so why the hell try whats already proved to be a failure and really openly caused the riots in london ,birmingham and liverpool back in them days ,,, my idea is this condem goverment is looking for it to fail so they start a process to hand it all over to there getting richer private landlords on the excuse " we tried everything to make it work and couldnt so it needs private finacial support ,,, lok out all you people on benefits , wether by youre own choice or by no fault of youre own , cause this goverment is likely to come up with the idea of LENDING you benefit money and you work it of doing the crap they wouldnt even let there dogs do , impo only

    Unsuitable or offensive? Report this comment

  • Chris

    Never being one to split haird Melvin - but didn't the love of your life, Ol' Mrs T, succeed in her aim to end the Cold War by interveening in the Polish Dock Workers' dispute - so no, the Tories do not have any current plans to 'invade' Poland - they've already been there and done that, and we are living in the world post such conquest!

    On a finer point - it is pleasing to see that you have got off of your normal 'it is all their own fault and if only they could learn to budget better, manage their money, cut their cloth etc' hobby horse. Maybe seeing the mess being caused by these ill conceived and poorly implemented plans you are being swayed into the camp that recognises the government is wrong.

    Unsuitable or offensive? Report this comment

  • Chris

    who put the 'd' next to the 's'? That should be hairs!

    Unsuitable or offensive? Report this comment

  • Melvin Bone

    Chris, the love of my life is Mrs Bone.

    Lack of learning to cook or budget is a massive problem for people on a tight budget Chris. I'm shocked you'd not agree that learning these skills is not important.

    Unsuitable or offensive? Report this comment

View results 10 per page | 20 per page | 50 per page

Have your say

You must sign in to make a comment

sign in register

Newsletter Sign-up



IH Subscription