Direct Payments:

Changes to universal credit announced by the new Work and Pensions Secretary, Amber Rudd, could mean it will be easier for landlords to receive the benefit element of rent payments direct to them, which otherwise would have been paid direct to their tenants.

Under the concessions indicated by Ms Rudd, about 15,000 families will no longer face having their child benefits capped after the government announced a minor U-turn over the introduction programme for universal credit.

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Plans will be ditched which would have extended a benefits cap on families of more than two children, with those children born before the system began in 2017 remaining exempt.

In addition, there will be a further delay in transferring around three million people from the old benefits system to universal credit. Instead, the government is to run a pilot scheme involving 10,000 people to be introduced to the universal credit process.

Direct Payments

The government has said it is looking into creating an online system that would allow private landlords to access social rents directly for their tenants on universal credit. This is a move, it is thought, to counteract recent reports that landlords are refusing to accept benefit tenants, chiefly because of the uncertainty of receiving rent – it would be designed to encourage more private landlords to take benefit tenants on.

Press reports have highlighted private landlords’ long held views that paying the benefit element of rent direct to the tenant, in many cases, is a mistake, as there is no guarantee that landlords will eventually receive their money.

Amber Rudd has said that, in a major change of policy if this actually transpires, she wants to give more certainty for landlords that that those tenants receiving housing benefit will actually pay their rent.

Ms Rudd had said:

“One third of Universal Credit claimants in social rented housing have their rent paid directly to their landlord. But in the private sector, that number is only 5%.

“People in the private rented sector already face a far higher risk of losing their tenancy, and I know from talking to claimants and landlords that the current system isn’t working for some of them.

“So we need to make it easier for tenants in the private sector to find and keep a good home, by giving landlords greater certainty that their rent will be paid.

“Therefore, I have asked the department to build an online system for private landlords, so they can request, where necessary, for their tenant’s rent to be paid directly to them.

“And I will consider what else we can do, because I am determined to help keep people in their homes.”

So far there has been no indication by government of any time scale for the new system to be introduced.

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