Please Note: This Article is 4 years old. This increases the likelihood that some or all of it's content is now outdated.

A timely appraisal by Bill Irving who is a Housing Benefit Expert and now Universal Credit Specialist Advisorhttp://ucadvice.co.uk

The DWP has published a compendium of the most recent reports, relating to the development and implementation of Universal Credit designed to assist Social Landlords prepare for the roll-out of the scheme, starting, on a national basis, from February 2015.

However, the advice in most respects applies equally to private sector landlords, so the publication will prove extremely useful to buy-to-let landlords.

Details can be found here:

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Bill says, “tucked away at the end of the associated press release, where it could be easily missed, is an even more important announcement (flushed out by 24 Dash.com) that landlords will be able to apply for “Third Party” rent arrear deductions from tenants’ Universal Credit, at the rate of 20% of their Standard Allowance, although, in most cases, the deduction is likely to be capped at 10% or 15% because the tenant has other secondary debts, like Gas/Electricity, Council Tax, Social Fund loans, Court Fines.”

At this time, Social Landlords make great use of “Third Party” rent arrears deductions from other means-tested benefits, like JSA, Income Support, ESA, Pension Credit. The current amount is £3.65 per week and is based on 5% of the tenant’s JSA Personal Allowance, so the Universal Credit higher deduction, will create the prospect of having the “rent arrears” debt, cleared much quicker than now.

The Standard Allowance for Universal Credit, is calculated on a calendar monthly basis, and varies depending on the age & status of the claimant. Currently the amounts are:

*Single claimant, under 25 – £246.81 – deduction @10% = £24.65pcm or £49.30 @ 20%

*Single Claimant, over 25 – £311.55 – deduction @ 10% = £31.15pcm or £62.30 @ 20%

*Couple both 18-24 – £387.42 – deduction @ 10% = £38.70pcm or £ 77.40 @ 20%

*Couple where one is 25 – £489.06 – deduction @10% = £ 48.90pcm or £97.80 @ 20%

The information release does not make mention of the other criteria, but you can expect the rent arrear will need to amount to, at least, 1 months’ arrears, accrued at the current landlord’s address.

Payments are likely to stop as soon as the debt is cleared or where the tenant vacates that landlord’s property. Private Landlords should welcome the move as “Third Party” deductions are not something they have made much use of in the past.

The application form for applying for “rent arrear” deductions is the same as the Alternative Payment Claim which can be accessed from the above link; it’s the last of the links (Rent Arrears form). The landlord completes the application and currently must send to the Wolverhampton Office of DWP where it’s scanned and later determined by the new “housing costs” office, based in Bolton, Lancashire.

If you’re interested in finding out more about Universal Credit; how to maximise tenants’ entitlement; and mitigate potential rental losses, look no further than http://www.ucadvice.co.uk/universal-credit

Alternatively, if you’re interested in finding out more about the range of services provided by Bill Irvine’s firm, e-mail bill@ucadvice.co.uk or phone him on 07733 080 389.

Please Note: This Article is 4 years old. This increases the likelihood that some or all of it's content is now outdated.
©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law, always seek professional advice.

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