The DWP plans to speed up repayment of arrears for tenants on Universal Credit next month, according to industry body safeagent.
Landlords can currently wait up to nine weeks for arrears to be paid, but the DWP has told the accreditation scheme and other stakeholders that it plans to change its processing method and cut the timescale to about seven days. However, the changes will only apply to new rent arrears applications – safeagent reports that Direct Rent payments as well as Rent Arrears payments will continue to be processed separately.
Isobel Thomson, safeagent’s chief executive, says the change will make a big difference to landlords who would know that in the event a tenant on Universal Credit falls into arrears, then these will be paid quicker.
She adds: “We look forward to the detail of the change when it is launched and well done to DWP for their work on this for the benefit of tenants, landlords and agents.”
Bill Irvine, at UC Advice & Advocacy, says there is currently a lag in payments when a landlord is awarded an Alternative Payment Arrangement (APA) or Managed Payment, which is caused by DWP using two separate systems.
“One deals with the Managed Payment (monthly housing cost) which is calculated and paid on a calendar monthly basis, whereas the arrears element is calculated monthly but paid on a four-weekly cycle, 12 times a year,” he tells LandlordZONE.
“Where an APA is awarded late in the tenant’s benefit assessment period, it can cause the arrears payment to miss the payment cycle and means a further wait of four weeks before payment is received. I suspect that’s what DWP is referring to and, if true, would represent progress.”
However, Irvine says landlords are still wrongly being refused APAs without explanation, as well as having APAs cancelled without warning or justification. He adds that the DWP could do much to improve its service including by suspending, rather than cancelling, payment when concerns arise over the legitimacy of continuing payments.
A spokesperson says: “We want to ensure that landlords receive their rent arrears in full and on time. That is why we have shortened the timescale to within seven days of the claimant being paid their monthly UC award, and landlords receiving payment.”