Tenants using ‘range of payment options’ in Universal Credit trial

Published by webmaster for allpay Limited in Housing and also in Communities, Local Government

Tenants involved in the Government’s direct payment demonstration projects are preferring to use a range of options to pay their rent, according to the Department for Work and Pensions (DWP).

Six sets of housing associations and councils across England, Scotland and Wales are currently trialing the direct payment of housing benefit to tenants ahead of Universal Credit, following concerns from landlords that the move could see their arrears rocket.

When the measure was piloted around 10 years ago by housing association L&Q, the group’s rent arrears nearly doubled.

Yesterday, the DWP released early findings from the projects – which are four months in – revealing that tenants are preferring to use a range of options to pay their rent including standing orders, payment cards or cash, as well as direct debits.

The findings also revealed that most tenants prioritise the payment of their rent, but that some “could imagine a situation when their housing benefit could be spent to cover unexpected expenses”.

Payment specialists allpay is the bill payment provider for all of the housing associations involved in the demonstration projects.

Business development director Nick Peplow said: “We have been supporting the DWP and housing associations with their existing services to help collect rent effectively. We hope to continue this dialogue ahead of the implementation of Universal Credit from next October.”

The demonstration projects have seen tenants use direct debits for their rent payments and Peplow adds that for the majority of claimants this will be the “cleanest way of doing things” under Universal Credit.

allpay is already seeing a surge in interest for its direct debit service – which can be set up for every date of the month with the option to vary the frequency e.g. weekly, fortnightly, four-weekly, monthly, etc.

It’s also investing in the service ahead of Universal Credit, says Peplow, which will complement its other payment solutions that allow tenants to pay with cash or debit cards.

The DWP’s early findings also showed that cash is often the preferred method for paying rent – even for those with bank accounts.

“allpay already works with PayPoint and the Post Office networks, allowing tenants to pay rent to their landlord with cash,” says Peplow, “and offers an internet and telephone service – including the new free allpay App – for tenants to pay using a debit card.

“For those without bank accounts, allpay’s prepaid card allows benefits to be paid directly onto it so the card can then be used to pay rent and other household bills.”