Lord Freud reveals direct payments pilots at NHF conference

Published by 24publishing for 24dash.com in Housing and also in Central Government, Communities, Local Government

Welfare reform minister Lord Freud has today announced half-a-dozen pilots that will test out direct payments to social housing tenants, after revealing that pensioners and ‘vulnerable’ tenants will continue to see their housing benefit paid directly to their landlord.

Plans in the Welfare Reform Bill will see social housing tenants paid the new Universal Credit directly from 2013, but with some exceptions for certain groups of tenants.

Today at the National Housing Federation (NHF) annual conference, Lord Freud said his department was looking for up to six councils and their housing association partners to test out two aspects of the reform:

• The best ways to support tenants in managing their budgets
• How the Government supports landlords if tenants miss their payments

This, he said, would “test out the best ways to support social landlords” under the new system, as the Government was “committed” to paying tenants their benefits directly.

He said the pilots would also look at a trigger for direct payments if tenants fall behind in their rents.

The pilots will take place from June 2012 and interested parties should contact the department at demonstration.projects@DWP.gsi.gov.uk

Releasing new data today, Lord Freud revealed that 30% of social housing tenants will be affected by the shift to direct payments, and that certain groups  - pensioners and vulnerable tenants - will contiue to see their housing costs paid directly to their landlord.

The breakdown, he provided, is as follows:

• 20% of working age tenants will be completely new to direct payments
• 35% of tenants do not claim housing benefit and, therefore, will be entirely unaffected
• 10% of working age adults are already receiving partial housing benefit so already have experience of managing their budget.
• 10% of working age tenants claiming housing benefit, the DWP feels are "too vulnerable" to manage direct payments themselves. Lord Freud announced today that the department will continue to pay their housing costs directly to their landlord.
• 25% of tenants in the social housing sector are pensioners claiming housing benefit. The department said that for pensioner tenants who receive housing support they will retain the status quo and the “vast majority" will have the housing element of the new Universal Credit paid direct to their landlord.

Lord Freud added that new pensioners will be able to choose whether they’d like to receive their housing payment or whether they'd like it to go straight to their landlord from 2013.

He said the choice will be extended across the social housing sector to include both current and future pensioners in both council and housing association homes.

David Orr, National Housing Federation chief executive, said: "There's only one thing missing from the Universal Credit proposals; why not actually give people the choice to have their housing benefit paid direct to landlords?

"For me when you talk about financial responsibility and all the other things Universal Credit is designed to promote, the denial of choice simply doesn't feel right. If the DWP can address this one particular issue, we will be with you all the way."