Wednesday, 01 April 2015

Universal credit pilot hit by payment error

Tenants on a universal credit direct payment demonstration project went overdrawn and incurred bank charges because of a payment error.

Oxford Citizens Housing Association and Oxford Council are running one of six year-long pilot projects to test the direct payment of benefit to tenants. The projects are designed to iron out potential problems before the roll out of universal credit from October next year.

OCHA, which is part of Greensquare Group, has 393 tenants on its pilot project.

Ann Cornelius, executive director of Greensquare Group, admitted yesterday that there were problems with the first two payments under the pilot, which were made in July and August.

Speaking at the National Housing Federation’s annual conference in Birmingham she said: ‘The first two payments went a bit wrong, and apologies to Oxford city [council] colleagues who may be in the room today.

‘We set up direct debits to come out on a particular date but they pressed the button to send the money into the account on the wrong date, so people’s accounts went overdrawn.

‘That really upset our residents because they were trusting us.’

Ms Cornelius said the association’s staff have had to work to restore tenants’ confidence in direct payments, after some ended their payments.

She said the third payment in September, was ‘better’ although 10 per cent of direct debit payments failed.

The payment errors reported by Ms Cornelius are the first sign of problems with direct payment.

Last month Inside Housing reported that Family Mosaic housing association, which is running a pilot with Southwark Council, had seen 80 per cent of direct payments go through in its first payment.

Brendan Sarsfield, chief executive of Family Mosaic, said this was a better than expected result for a first payment under the new system.

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