Wednesday, 01 October 2014

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.

Readers' comments (25)

  • "OCHA, which is part of Greensquare Group, has 393 tenants on its pilot project"
    remind me again - how many people are relying on this from next year ??

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  • Usual Suspect

    great start

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  • Iron Fist

    To IDS , told you so!

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  • Melvin Bone

    To be fair this is a problem that could have effected any DD for any reason (IE a DD for Council Tax).

    To say for this reason UC is doomed is wrong.

    There are many other areas where it can fail...

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  • Rick Campbell

    BOVINE EXCRETEMENT ALERT: DWP starts media campaign on Universal Credit IT tomorrow

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  • Rick Campbell

    Quite so, IMHO Melvin.

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  • Joe Halewood

    Lets not forget that the 'wonderful' Universal Credit IT system (estimates range from £2bn to £3.1bn of public money to develop) can deal with 5000 cases per day.

    Thats 5000 cases times 365.25 days per year of a maximum capacity of 1,826,250 cases per year.

    There are 5,031,740 HB claimants currently and they need their HB assessing at least once per year (thats asuming no changes in circumstances)

    On top of 5m+ HB elements to each case we also have tax credits and welfare benefit elements to be assessed before each case can be decided.

    When I went to school at least 5m was more than 1.8m...perhaps it is not under the new E Bac proposals that nice Mr Gove wishes to see?

    Finally - even after two previous errant attempts the third try on just 0.007% of the HB cases nationally (339 of the 5.1m) still had a TEN PER CENT COCK UP RATE!

    Anyone care to project the cock-up rate when the other 99.993% of HB cases alone are added into the UC IT system!

    Just phoned the speaking clock...beep beep beep, at the third stroke the number of wrong housing benefit cases will be 500,000 per year....beep beep beep

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  • Usual Suspect

    True melvin. key question is if it fails in trials or looks like it is going to cause HA's etc significant difficulty . Will anyone admit it ?
    I suspect not.

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  • Joe Halewood

    Rick, my new avatar is better!

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  • Rick Campbell

    Liking your new avatar Joe.

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