Universal Credit: crunch decisions to be made on housing payments

Published by Ross Macmillan for 24dash.com in Housing and also in Central Government, Local Government

Government ministers will meet this week as they look to define the 'vulnerability criteria' that will determine whether tenants continue to have their housing benefit paid directly to their social landlord from 2013.

From that date, housing benefit - among other means-tested benefits - will be rolled into a Universal Credit which will be administered centrally, and paid directly to tenants.

The bulk of claims will be made online with claimants likely to be paid calendar monthly in arrears.

The Government has said, however, certain groups will continue to see their benefit paid direct to the landlord such as pensioners and “vulnerable people” which it has previously estimated the latter to stand at around 10% of social housing tenants.

However, pressed in a 24housing-organised seminar on Universal Credit held yesterday in Manchester, civil servants at the Department for Work and Pensions (DWP) indicated that the figure was "likely to be higher" than 10% and that the definition of vulnerability was still to be defined.

Felicity Ridgway, part of the DWP's Universal Credit Programme, said the department was weighing up a decision to define it either in "black and white terms" so it could be automated during the claim, or whether it would leave it to human discretion - i.e. for social landlords or the Government to apply.

She said: "We're trying to figure out whether we want a really defined definition that would be black and white to the point that we can automate it, or we give it to human discretion so it's more of a subjective decision-making process about what is vulnerable and what isn't. If we go down that route, who would be to choose, would it be central government, local authorities or housing associations themselves?

"The likelihood is it may be some sort of balance between the two. We're going to ministers to ask them what approach they'd like us to pursue this week."

It was also revealed the Government is looking to support claimants in the first month of their Universal Credit claim - as it is likely to be paid monthly in arrears.

She said the department was looking at "transitional payments".

She said: "At the moment I don't know whether we'll do transitional payments or transitional loans or ease them in with a breakdown of payments for the first couple of weeks.

"That's still being designed but we are aware it's going to be a really difficult period and we will need to have something in place to support it.

"If we make a transitional payment, for example, if you're coming from jobseekers’ allowance where you're used to being paid every two weeks, and you've got to wait for Universal Credit a month later potentially, if we make a payment in the middle will that be a loan or a grant. That's one of the big questions the department is looking at - looking at the cost and best value impact on that.

"The hardest time, and we do recognise this, will be in the first month. We are looking at different options to support claimants over that first month."

In June 2012, the Government will pilot direct payments through six local authority and housing association demonstration projects. It has received 60 expressions of interest for the pilots including from the likes of London-based Family Mosaic and Salford-based social landlord City West Housing Trust.

The pilots - which will take place in each UK region - will test out safeguards for landlords and budgeting support for tenants.

A trigger that will see direct payments switched to landlords should tenants fall into arreas will also be tested - mirroring how the Local Housing Allowance (LHA) system works.