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Direct payments landlord wants policy u-turn

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

Direct payments landlord wants policy u-turn Direct payments landlord wants policy u-turn

The chief executive of one of the housing associations involved in the Government’s direct payment demonstration projects says he hopes the results will change policy at a national level and that tenants will retain the choice to have housing benefit paid to their landlord.

Wakefield and District Housing (WDH) is one of six teams of housing associations and councils road testing the direct payment of housing benefit to tenants ahead of Universal Credit (UC).

Under UC, tenants will lose the choice to have their housing benefit paid directly to their landlord and will be handed their benefits - including housing benefit - in a lump sum. Pensioners and those tenants classed as "vulnerable" - which is still yet to be defined - will continue to have their housing benefit paid directly to the landlord.

The 12-month demonstration projects kicked off in June and will see each project pay housing benefit directly to a sample of 2,000 tenants.

Earlier this week, the DWP released generic information about the projects – such as the importance to prepare tenants and that a range of payment options were being used to pay rent – but it didn’t disclose information on arrears or safeguards.

Kevin Dodd, chief executive of WDH, said he would be requesting to bring in a system that gives tenants the choice to have the housing element of Universal Credit paid to their landlord, "reducing the increased costs of direct payment rent collection".

He said: "For those who are able to manage their own finances then direct payment as part of Universal Credit could give them greater financial responsibility. However, for those less able to manage their own finances there needs to be the option to pay housing costs to the landlord.”

He added: “I hope the demonstration project results will change policy at a national level, which is why we are involved.”

Earlier this month, the 31,000-home landlord said it had stepped up interventions on the project to ensure rent due is collected. 

Dodd said WDH has been encouraging tenants taking part in the demonstration projects to pay their rent and other charges by direct debit.

He said: “Around half of the 850 tenants taking part in the project now use this method and we are able to offer flexibility around the days we receive payment, which has been a significant advantage.

“A number of tenants have weekly or fortnightly direct debits because they feel this is the best way to manage their finances when their income is from different sources. The forthcoming changes with the introduction of Universal Credit may alter this.”

Mr Dodd also said the way tenants manage their money also varies with some using their housing benefit payments to pay part of their rent, and the rest to pay for other things they consider essential. 

He said: “They then use other income such as their wages or other benefit payments to pay the remaining rent to us later in the month.

"Our tenants also need to have confidence that the payments will go into their accounts, and ensure that they don't have other outstanding charges that might be taken from their accounts before they have the chance to pay their rent.

“We see direct debit as the most effective way to manage direct payments, especially if we can steer more tenants towards paying their rent in one transaction. This would not only ensure rents are paid but would also reduce our costs that are increased by multiple transactions.”

Another of the housing associations involved in the projects, London-based Family Mosaic told 24dash it had no regrets taking part in the project.

Viv Davies, head of collection and credit control at Family Mosaic, said: “We have learnt some really useful information regarding preparation, how we work and how we support tenants on to direct payments. It is showing us the level and type of preparation that is needed.” 

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