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17/12/25 3:30 pm
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Hundreds of thousands of tenants could get the housing element of their Universal Credit payments incorrectly suspended and stopped this year as the DWP ramps up investigations into fraud and overpayments, a benefits expert has warned.
New legislation - the Public Authorities (Fraud, Error and Recovery) Act – means the Department for Work and Pensions (DWP) has new modern fraud prevention powers to directly access and take money from bank accounts of claimants who have not repaid benefit overpayments, as well as to access bank data to verify correct payments and detect fraud.
DWP is also doubling the size of the team with up to 3,000 extra staff set to conduct eight million reviews in the next two to three years.
Bill Irvine, at UC Advice & Advocacy, explains that UC claimants will face increased scrutiny, particularly those cases deemed high-risk such as HMO tenants, those in high value rental areas, or who made their initial claim during the COVID period when the usual validation processes were suspended.
Problems can often arise inadvertently, says Irvine, which DWP staff don’t always appreciate. Payments can be stopped when DWP makes validation checks, especially when new information is provided which includes minor differences, such as if a landlord has used a business address in the application for Direct Payments and then the tenancy agreement uses their home address, or if a tenant neglects to report a change of circumstance.
“They’re also sometimes asking HMO tenants for proof of council tax or utility bills liability – when tenants aren’t liable,” Irvine tells LandlordZONE. “This missing information is enough to make DWP suspend payments and can result in weeks or months of misunderstanding as staff usually won’t explain why this has happened.”
During this same period, any existing arrangements for Direct Payments will be cancelled, causing a build-up of rent arrears and requiring fresh applications to ensure reinstatement.
Unlike Housing Benefit, all overpayments (including official errors) are recoverable, and the default position is to pursue recovery, initially, against the person or organisation that received payment of the housing costs element. If Direct Payments were being made, that means the landlord. Although there are limited grounds for appealing, arranging tribunals can take anything between six to 12 months. If an appeal is successful, the landlord would eventually be refunded but this could play havoc with cash flows.
“Landlords providing accommodation to benefit-reliant tenants should be able and willing to assist, especially those tenants who are disabled or unlikely to engage directly with DWP,” advises Irvine.
A DWP spokesperson says: “Targeted case reviews have already saved the taxpayer £1 billion by blocking incorrect Universal Credit payments and are set to save an additional £1.2 billion in 2030-31.
“The decision to pursue eviction proceedings is a private matter between a landlord and their tenant. We offer support to tenants experiencing rent arrears, including direct payments to landlords through Alternative Payment Arrangements, advice through Jobcentre work coaches, and signposting to debt advice services.”
It adds that while targeted case reviews check the accuracy of UC claims and can request evidence from an individual, the new Act allows for requests from any relevant third-party information holder – not from tenants themselves - and can only be used where there is a reasonable suspicion of fraud.
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