How Universal Credit puts people in rent arrears.
Housing is one of the biggest, more obvious ways Universal Credit fails claimants. Besides the much covered policies surrounding young people and housing, the way the benefit processes these payments in general almost guarantees arrears.
I’m hardly the first person to criticise how this benefit handles this, CPAG have alluded to many problems in their reports, including their Rough Justice report on how Assessment Periods work on UC.
Alex has previously written about the worrying figures regarding housing underpayments on Universal Credit.
“A more worrying sign is that the majority of errors on Universal Credit relate to housing costs. £26 million pounds was underpaid to claimants last year. Again considering the lower amount of claimants this means a significant amount of people may have experienced housing problems because of UC.” – Read More
Universal Credit and The Housing Element
The first thing to consider is that unlike housing benefit, Universal Credit does not typically pay claimants’ landlords directly. Instead, they pay the claimant as part of their monthly award called the housing element. The explanation for this is that it helps get claimants ready for work by forcing them to budget their money based on their expenses.
Claimants can request an Alternative Payment Arrangement (APA) and ask that the rent element goes directly to the landlord, but they will need to demonstrate a need for this. Typically that is in the form of arrears, but it can also be vulnerabilities such as mental health issues, previous homelessness or certain other circumstances. If it is due to rent arrears, the claimant must be in a minimum of two months arrears for an APA to be approved.
This does not apply in Scotland, where claimants can request to pay the landlord directly or pay themselves whenever they choose, a fact which demonstrates that in this regard the system is perfectly capable of being more flexible, the Department simply chooses not to extend these options to claimants outside of Scotland.
Landlords can also request Alternative Payment Arrangements – APA. If a claimant is more than two months in arrears, then this will be set up at the landlord’s request. The claimant cannot stop this unless they are able to prove there are no arrears, or in the case of a private landlord, that they are in a dispute with the landlord.
Universal Credit often makes rent arrears worse rather than fixing them. – »Click to Tweet«
“Batch payments” are how landlords are paid if a claimant has an APA. The logic behind this is simple enough: landlords, like claimants, have their own payment date. Rather than paying them various amounts each day, the landlord will receive a batch payment with all of their tenants housing element within it.
The problem is immediately obvious. Every claimant on Universal Credit has their own Assessment Period, so how does this match to a landlord’s batch payment date?
It doesn’t, but it gets even more complicated. Batch payments have been around for longer than Universal Credit. As such, they were created at a time when benefits were paid weekly or fortnightly. So batch payments are not monthly, they are four-weekly. Why does this make things harder for claimants?
Suppose someone makes a claim on 7 September. Their first Assessment Period would run from 7 September to 6 October, and their first payment would be on 12 October. (It would normally be on the 14th, but as that’s a Sunday, the claimant would be paid on the Friday before.)
Let’s say that the landlord just had their last batch payment the day before however, on 11 October. What does this mean for the claimant’s rent element?
It means it will be put aside for the next batch payment. At no point is this explained to claimants, who will often receive a call or a letter from their landlord telling them about their arrears. Bearing in mind that an APA can only be requested when a claimant is already two months in arrears, this delay can exacerbate things.
In this example, because batch payments are four weekly, the next payment would be on the 8 November. That means that someone who makes their Universal Credit claim on 7 September may not receive help with their housing until 8 November through no fault of their own.
Read my previous post Universal Credit – The Truth About Advances for more information about Universal Credit and the problem with offering loans in the first month of a claim.
Why is it like this?
This is another example of the patchwork way Universal Credit has been developed. Rather than review the four-weekly batch payment dates, UC simply applies a monthly payment over the top. This is of course not the only problem with housing and Universal Credit, and no doubt housing will be the focus of future posts, but it is one of the processes I think is most directly responsible for worsening claimants’ hardship for no other reason than because it is more convenient for the Department.
As always, please note that this information was up-to-date at the point I left Universal Credit on 20 July 2018 and is based on the assumption that no major changes have taken place since then. I do my best to fact-check myself where possible, but with limited access to current DWP guidance this can be difficult.
Follow me on Twitter at @BayardTarpley for updates on future posts about Universal Credit or to let me know if there’s anything about Universal Credit that you would like me focus on in a future article from an agent’s point of view.
Thanks again for reading
DWP demand I send medical reports for PIP appeal as they never used any for their original decision. – Alex Tiffin – READ MORE.
We don’t get paid to write but we put a lot of time and research into providing relevant, engaging and helpful content. If you’d like to make a donation you can do so via PayPal by clicking here.