Arthur takes a look at what the slow roll-out of Universal Credit will mean for both social landlords and tenants.
The roll-out of the new universal credit system has been going since 2016. Universal credit will eventually replace any and all benefit payments by 2022, supposedly saving the government around £7 billion per annum. But, for both tenants and landlords who have to handle housing benefit payments, there is a lot of fear about what will happen to them and the insecurity they might face.
What will happen to my tenants current benefit plan?
All current benefit plans will be ‘grandfathered’ until 2022. This means that, as long as they do not change what aid they are applying for, their current plans will remain the same in terms of amount and rent schedule. As soon as they apply for any type of change to their benefits, they will be switched to universal credit payments.
What happens to my current APA?
Alternate payment arrangements will not be affected as long as your tenants remain on their current benefit scheme. However, if they change their scheme, or are not currently claiming benefits, there are a few changes. The same rules will apply in terms of arrears. Payments will also be made on a date you specify, rather than all on one date. This has been done to ease the pressure on the council to pay all landlords on a single day. Other than that, APA will be staying very similar. For example, you will still be able to get the payments sent directly to you.
What happens if a current tenant applies for universal credit?
Soon, if a tenant that is not currently on a benefit plan applies for assistance, they will be directed towards universal credit. This means that there will be a four to six wait before their eligibility has been decided and their first payment is made. Moving forwards, universal credit is paid monthly rather than four-weekly. If your tenant is unable to pay you in the interluding gap between their first payment, they are able to claim up to 50% of their monthly allowance as a ‘loan’ as soon as they apply. This will then be paid back in the future by removing an agreed amount of their universal credit each month.
What if my tenant is vulnerable and cannot apply themselves?
Previously, as a landlord you may have helped some of your more vulnerable or less tenant’s to apply for their benefits. But, through universal credit you will not be able to intervene on their behalf without the express permission of the tenant. Furthermore, due to the online system that will now be used, and the sensitive information stored on it,tenant’s must give this permission must be given each and every time you contact the council on their behalf.
For more information about how universal credit will work, the DWP have produced a video explaining the new process.