Good News for Landlords with Universal Credit
After a series of negative measures for landlords from the government over the past few years, landlords finally have a reason to celebrate!
The Department for Work and Pensions (DWP) has announced that Universal Credit can be paid directly to landlords and that “explicit consent” from tenants is no longer required.
Universal Credit (UC) was first introduced in 2013 to replace up to six other benefits, such as housing benefit (local housing allowance) or income support etc. When the government set this up they wanted claimants to take responsibility for their own financial affairs by paying them on a monthly basis, to echo the world of work where most employees are paid monthly. Claimants were advised to make housing costs a priority; however, many landlords were finding the complete opposite, with many tenants not paying their rent.
Where, for various reasons, a claimant is unable to manage their own finances the DWP offers alternative payment arrangements (APAs). If a tenant is receiving Universal Credit and falls behind with their rent (for a period of two months or more), a landlord can apply to the DWP to have the rent paid directly, under a process known as managed payment (MP).
The reason for celebration is because when a landlord previously applied for a MP the DWP stated that a tenant had to give “explicit consent” before the application could progress. Needless to say, many tenants either ignored the request or simply said no, leaving the landlord with lost rental income and the daunting task of taking steps to recover it.
Now the DWP has advised its staff that “explicit consent” from the tenant is no longer required to progress an APA. This will mean that landlords can be paid directly and that future APA requests should be processed much quicker.
It is likely however, that few landlords will be aware of the change as the DWP has chosen to adopt a low profile in terms of broadcasting the change. Many DWP frontline staff may even be oblivious to the new guidance.
Landlords should be sure to know their rights and look to progress this if it is in their benefit. If you are a landlord and need assistance with this or any other such matters, please get in touch by calling 01752 203500 or email philip.oke@GAsolicitors.com.