Posts with tag: Universal Credit

The government announced yesterday that the full rollout of its Universal Credit welfare scheme has been delayed until at least 2024.

Originally beginning its rollout in 2013, Universal Credit (UC) was supposed to be fully operational by 2017 but a series of delays and ballooning costs have set the project back and it will now not be fully rolled out until 2024. This is the SEVENTH delay since the scheme’s initial proposal.

Minister for Welfare Delivery Will Quince said: “Universal Credit is the biggest change to the welfare system in a generation, bringing together six overlapping benefits into one monthly payment and offering support to some of the most vulnerable people in society.

“It is right that we revisit our forecasts and plan, and re-plan accordingly – ensuring that the process is working well for people on benefits.”

As well as delays, Universal Credit has been beset with criticism. The benefit is paid monthly, beginning after a five week mandatory waiting period, meaning that many recipients fall into debts and rent arrears in the waiting period. 

Renters have been pushed into financial hardship, and some, to the brink of homelessness due to problems with the scheme such as cuts to funding, IT problems, late payments and of course, a complete lack of support when navigating the complex process of making a claim. 

The criteria for landlords to receive the portion of UC designated for rent payments is also difficult to achieve, with both tenants and landlords having to jump through numerous hoops before demonstrating that this is the best course of action. This has left the most vulnerable renters in our society in rent arrears.

Recent research by the National Landlords Association (NLA) has shown that the number of landlords willing to accept UC tenants has taken a significant hit in recent years.

Meera Chindooroy, policy and public affairs manager at the NLA, said: “Our research shows that a decreasing proportion of landlords are letting to tenants in receipt of local housing allowance or Universal Credit, and that there is a wide variation across the country.” 

The Department for Work and Pensions (DWP) recently published updated guidance for landlords with tenants in receipt of Universal Credit.

The information is designed to help understand what they can do to help their tenants prepare for their move to the single Universal Credit benefit payment and make rental payments directly to their landlord themselves. 

It also explains what support is available for tenants who may need help moving to the new system.

Information on Alternative Payment Arrangements can be found here.

Guidance to service charges for landlords can be found here.If a tenant is having difficulty paying their rent, fill in the UC47 form to request payment of rent from a tenant’s Universal Credit.

Many landlords are currently unable to identify which of their Universal Credit tenants have paid them due to a change in the payment system which has removed all unique references and replaced them with a generic 28-digit number. 

Caridon Landlord Solutions says that around three weeks ago there was a change to the system that allowed the housing element of Universal Credit to be paid directly to landlords. Up until then, each payment included a unique reference for each tenant, but this has been replaced with a random 28-digit number, leaving landlords scratching their heads over which tenant has paid them.

Many landlords have multiple tenants that have opted to use the UC47 managed payment method after those tenants have demonstrated that they are unable to manage their finances or have fallen into arrears. The method allows the housing element of the recipient’s Universal Credit payment to go directly to their landlord, eliminating the risk of the money being spent elsewhere.

Sherrelle Collman, Managing Director of Caridon Landlord Solutions, which specialises in helping landlords with tenants in receipt of Universal Credit, says she has been inundated with phone calls from landlords asking how to interpret the new number reference. 

“We were told last week that there had been an upgrade to DWP’s system which has caused the change, but we have been unable to get any further information on how we can allocate payments or what is being done to rectify the problem.  

“We called Universal Credit Full-Service line but they are unable to help without a National Insurance number, date of birth and/or address.  Then we called the Third-Party deduction line, and they are unable to help unless the tenant is in arrears and now has third party deductions set up. Some landlords have numerous payments for the same amount but for different tenants, making it impossible to identify who the payment is for,” says Sherrelle.

She went on to say that if the issue is not quickly resolved, many tenants could be accused of falling into rent arrears, when this may not be the case. Landlords will be unable to accurately update their tenant’s rent account.

UPDATE

When asked to comment, A DWP Spokesperson has said:

“Shortly after private rental payments to landlords were automated in December an issue with reference numbers was identified. This was quickly rectified, we apologise for any inconvenience.”

The spokesperson also advised us that:

• Any landlord who has identified an issue with private rented sector managed payments should raise this with their local partnership manager or Jobcentre Plus contact so that it can be investigated.
• This contact should be able to provide a list of claimants against each payments to the landlord.
• The DWP has now apologised to Caridon for the error.