Almost a third of Universal Credit claimants (around 2 million) are in the private rental sector. At the present time, both social and private tenants, claiming the controversial benefit, are responsible for making rent payments to the landlords themselves. However there is some evidence that the majority of tenants would prefer the rent to be paid directly to the landlord.
Suggested changes in the way a Universal Credit claim is set up, may see the housing benefit portion of the benefit, paid directly to landlords should they wish it. At present only tenants on Universal Credit who are struggling to manage payments and who are in arrears can apply for a direct payment to landlords. This is done in the form of an alternative payment arrangement (APA). Landlords too, can also make the request by submitting a managed payment form (UC47). In theory the new online system will allow landlords to request that their tenant’s rent, be paid directly to them.
The Universal Credit system pays monthly in arrears and is in most cases a single, monthly payment paid directly into the claimant’s bank account; payments include all eligible housing costs. Consequently this has left many claimants unable to budget, to ensure they have enough to meet their obligated payments. According to a February 2019 report by the Citizen’s Advice Bureau, 49% of people seeking their help with the Universal Credit claims were already in rent arrears.
In late 2018, due to the upheaval that Universal Credit brought with it, pushing tenants into arrears; the government introduced some advance loans for new claimants, which allowed an additional two weeks of housing benefit, while the claimant waited for their new claims to be initialised.
Universal Credit scheme is generally seen in a negative light and has definitely shown some impact on landlords. They are discouraged from letting to tenants in receipt of benefit because they are concerned they will not receive payment.