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Lord Freud: Universal credit safeguards are working

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Lord Freud: Universal credit safeguards are working


Published by Anonymous for in Universal Credit and also in Central Government

Lord Freud: Universal credit safeguards are working Lord Freud: Universal credit safeguards are working

By Lord Freud, the government’s minister for welfare reform and one of the chief architects of universal credit

The roll-out of universal credit is continuing to gather pace as we extend the programme across the whole of the North West.

In a phased approach, new jobcentres will gradually come online during the remainder of the year until all the offices across the region are offering universal credit to single people.

We will also start rolling out the benefit to couples and families for the first time.

We are making steady progress. It was always our intention to move forward in a controlled and careful way as part of our long-term economic plan.

This strategy has also allowed us to learn as we go, making changes quickly when they are required so that the system runs as smoothly as it should be, while limiting disruption to claimants.

It has been vital for us to work hand-in-hand with our partners so that claimants are supported. And we have always been clear that protections will be put in place for social landlords as direct payments become increasingly common.

Fixing our broken welfare system on a scale not seen since the end of the Second World War was never going to be easy and some have been quick to claim that arrears are rising as a result.

But in stark contrast, the latest data from housing associations has revealed that rent arrears have fallen for the second quarter in a row.

This is encouraging and we will continue to monitor the situation closely.

However, we know that some claimants may need extra help in adapting to the changes in the way they are paid their benefits. That’s why all new UC claimants are asked about their ability to manage their money, and free money advice is offered to those who need it.

We have worked closely with housing associations, landlords and local authorities to develop safeguards. These build on the Lord Freud measures that are in place for landlords in the private sector where tenants already receive direct payments.

To inform our thinking, we trialed six direct payment projects across Britain, each of which tested different aspects to see what protections worked best.

We learned that a key safeguard for landlords is that if a tenant builds up arrears equivalent to two months’ rent, they will be switched back to managed payments.

Landlords will also be able to recover arrears directly from tenants’ benefit payments.

In the cases when a tenant is switched back, budgeting support will be offered to return them to direct payment once arrears have been cleared.

We know that in the past landlords have had to speak to different teams within the department about different issues, so we have streamlined that process and have created a central point of contact.

This team has responsibility for offering advice across the board. And because they will be in regular contact with landlords, they are best placed to understand how things are working on the ground. It will be up to them to ensure UC beds in properly.

Landlords can turn to this team to request alternative payment arrangements and to request deductions for arrears in cases where they are considering pre-eviction action.

Obviously there will be people who are not suited to direct payment. In these cases alternative payment arrangements will be considered, including more frequent payments or managed payments to landlords.

These measures put our support for social landlords on a more formal footing.

Our reforms empower tenants by allowing them to pay their own rent just as people in employment are expected to do.

This will give claimants a far more realistic taste of what to expect when they start working, and will remove a potential barrier that prevents some people from finding a job.


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