Sign up to our Editors Choice newsletter now! Click here

Expert says HAs shouldn’t need to collect rent upfront in wake of universal credit storm

Accessibility Menu

Menu Search

24dash - The UK's most up-to-date social housing and public sector news website

Expert says HAs shouldn’t need to collect rent upfront in wake of universal credit storm

24DASH.COM Logo

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

Expert says HAs shouldnt need to collect rent upfront in wake of universal credit storm Expert says HAs shouldnt need to collect rent upfront in wake of universal credit storm

Image: Housing via Shutterstock

A universal credit (UC) expert has said that housing associations shouldn't need to ask for rent up front, in the wake of a storm that blew up after two social landlords started to request that tenants pay a month's rent in advance as the switch to UC looms.

Both Town & Country Housing Group and Six Town Housing have been heavily criticised after making moves to ensure tenants are paid-up a month in advance, as fears grow that UC will leave many in arrears.

However, UC expert Bill Irvine says that, though housing associations are understandably concerned about UC, most have already made plans to help tenants cope with the migration process and changes they'll experience under UC.

Doing so could help avoid substantial arrears accruing - if the Department for Work and Pensions' (DWP) stated plans work out.

Mr Irvine explained: "The DWP says it will inform local authorities three months in advance of an area switching to UC. Local authorities, in turn, are legally required to notify RSLs of housing benefits termination, where payments are made direct.

"Once informed, local authorities should be able to alert housing associations to the fact their tenants in receipt of HB are going to switch to UC on a given date.

"The housing associations, prepared as most are for the change, should then be able to work with their affected tenants, making sure that they make their UC claim and supporting evidence (rent statements) in plenty of time before their first post-HB rental payment is due. In many instances, the associations will also be making requests for Alternative Payments Arrangements and "third party" deductions for existing rent arrears."

UC sees tenants on housing benefit given their HB along with any other benefits they are claiming as one directly paid monthly lump sum. Direct payments to landlords have been abolished under UC, meaning tenants have to make sure they pay their rent themselves from the lump sum they receive.

There are fears that some tenants will struggle to properly manage their payments under the new system, sending them into rental arrears.

There have been accusations that the housing associations are interfering with their tenants' private financial matters.

Speaking to the Guardian, Gillian Guy, Citizens Advice's chief executive, said: "It's for householders to manage their finances, not landlords or housing associations.

"There's a difference between advising people to be financially prepared and doing it for them, and it would be concerning if the latter were the case." 

In an apparent attempt to prevent the possibility of arrears, Town & Country Housing has asked its tenants in receipt of housing benefit to pay an extra £14.60 a month until they have 'banked' a whole month's rent in credit so that they are not caught out when they are switched to UC.

In a statement, Town & Country said: "Tenants can choose to pay their rent weekly, fortnightly or monthly. The rent is due in full on the first day of that period so that their rent account does not fall into arrears. This applies to all tenants whether they are on housing benefit or not.

"We understand that this will be difficult for anyone who is likely to be on full housing benefit, in which case we ask for the minimum of £14.60 per month.

"Over time this will make sure that their rent account is in line with their tenancy agreement. It will also help to ease the transition when Universal Credit is introduced and residents will be responsible for paying their own rent from the credit they receive.

"We offer help and advice to anyone who is struggling to pay their rent, especially if they are affected by the government’s welfare reform changes."

Meanwhile, Six Town Housing writes on its website that "Universal credit will be paid four weeks in arrears. So you need to make additional rent payments now if you are affected by the introduction of Universal Credit. Otherwise, you are at risk of your rent account falling into rent arrears."

Laura Conrad of Six Town Housing said “Universal credit is being slowly phased in to Bury and we are offering advice and information to affected tenants to minimise the impact of these changes.

"There is an advisory note on our website, suggesting that tenants affected, give consideration to making additional rent payments if possible, to avoid the risk of then going into arrears. As with the introduction of the Under-Occupancy Charge, Six Town Housing continues to work in partnership with a number of agencies to minimise the impact to tenants.

"The Citizens Advice Bureau hold drop-in sessions on site, we have a number of employment initiatives in place through our Steps to Success Programme and a strong partnership with Manchester Credit Union to support financial inclusion. We funded the expansion of the Credit Union into Bury for the benefit of our tenants. We have continually engaged with tenants through face-to-face visits, roadshows and advice sessions. We are more than just a landlord - support and advice to our tenants is at the very heart of what we do."

Kevin Williamson, head of policy at the National Housing Federation, said: “Housing associations are facing the challenges of welfare reforms head on. As well as supporting tenants through the changes, it also means managing their organisation’s finances so that they can continue to provide great services and ensure people can stay in their homes.”

Comments

Login and comment using one of your accounts...