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First output from direct payment projects published

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First output from direct payment projects published

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Published by 24publishing for 24dash.com in Housing and also in Local Government, Universal Credit

Benefits protest aimed at Lord Freud planned Benefits protest aimed at Lord Freud planned

The first published output from the independent evaluation of the Government’s direct payment demonstration projects has been published warning that a substantial minority of social tenants will need a great deal of long-term support to cope with the changes.

The projects were set up by welfare reform minister Lord Freud ahead of paying housing benefit directly to social tenants as part of Universal Credit from October 2013.

The research took place in May-June 2012 and involved face to face survey of 1,639 tenants in the five project areas: 'Oxford', 'Southwark', 'Shropshire', 'Torfaen' and 'Wakefield.' The report does not include data from the sixth project area, Edinburgh, as implementation and research activity there started later than the other areas.

The survey aims to provide a baseline position prior to the demonstration projects going 'live'. It revealed:

  • When asked how ‘well’ they would manage the shift to direct payments, more than half (54 per cent) thought they would ‘cope’ ‘well’ but 31 per cent thought they would ‘cope’ ‘poorly’. Almost four in ten said it would be ‘difficult’ to ‘manage their finances’ if housing benefit was paid directly to them.
  • About a quarter of all respondents reported that they would need support if housing benefit were to be paid directly to them. Of those who reported a need for support, 43 per cent said they would need ‘a great deal’ of support and just under half thought they would need support for the long-term.
  • The most common method by which respondents on partial housing benefit normally paid their rent was cash (35 per cent paid in this way), followed by a rent payment card (27 per cent). In total, only a fifth of tenants normally used a fully automated method – direct debit or standing order – to pay their rent.
  • Twenty-two per cent of all respondents were not up to date with their rent. This is about double that found in a recent survey of private tenants in receipt of the Local Housing Allowance in 19 case study areas in Britain.
  • Tenants renting from housing associations reported significantly higher incidence of arrears than those renting from local authorities (25 per cent compared with 18 per cent). The most commonly mentioned reason for rent arrears was a drop in income – due to redundancy, sickness or disability, relationship breakdown or other reasons – which accounted, in total, for 29 per cent of cases of arrears. The next most commonly cited reason, mentioned by 22 per cent of tenants in arrears, was problems with the administration of housing benefit.

The findings suggest that the introduction of direct payments of housing benefit is likely to result in a "number of challenges for both tenants and landlords".

It warned: “The impact of these challenges may be lessened by the money management and budgeting support provided to tenants by landlords and local agencies. However, this support is likely to be relatively resource intensive. This is because many of the substantial minority of tenants who anticipated that they would need support to help them manage if housing benefit was paid directly to them wanted ‘a great deal’ of support over the ‘long-term’, rather than just at the beginning while they adjusted to the new arrangements.”

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