Despite praising the new online Alternative Payment Arrangements system, Secretary of State Thérèse Coffey has told MPs that she doesn’t want to see a return to the widespread use of directly-paid housing benefit.

Landlords hoping that that the new online Universal Credit direct rent payments system for Alternative Payments Arrangements (APAs) will ease the pain of renting properties to claimants have been dashed by Thérèse Coffey, Secretary of State for Work and Pensions.

In a session before a Zoom-hosted parliamentary scrutiny committee yesterday afternoon, she and DWP Change Director Neil Couling were grilled by MPs on a wide range of Universal Credit issues including housing benefit.

They confirmed that some 2,500 APA applications have so far been processed using the new system since mid-May.

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Coffey said she welcomed the new system which, as LandlordZONE reported on 14th May, was developed in partnership with a specialist consultancy, Caridon Landlord Systems.

Online APAs

It enables landlords and tenants to request that the housing portion of Universal Credit payments are diverted directly to the landlord via an APA without the need for any physical paperwork.

But Coffey made clear during the discussions that this system is only for those tenants who ‘really struggling’, rather than being a new and easier way for more landlords to arrange APAs.

Coffey said she didn’t want to see a return to the ‘default’ payment of rent to claimants that had existed before Universal Credit was introduced, and that re-introducing it now would ‘add too much complication’ to the system.

This was a reference to the way Universal Credit payments contract and expand for claimants depending on how much they work, what kind of accommodation they live in and their personal circumstances.

But Neil Couling was more candid about why the new system is unlikely to be rolled out more widely; he said the DWP is still set on compelling claimants to run their own personal finances rather than relying on the state for rent payments, and that the new online system was there only to catch the most distressed cases.

Comment: Sherrelle Collman, Managing Director of Caridon Landlord Solutions

“We fully understand that one of the key objectives of the introduction of Universal Credit was to simplify the system and make work pay, giving those in receipt of Universal Credit a monthly payment, mimicking how many people in full-time employment receive their salary and preparing them to manage their finances.

“However, we know from experience that rent arrears have not only increased since the introduction of UC, but also a large proportion of claimants are falling into arrears within the first couple of months. Whilst it is important to empower tenants and provide support into independent living, making direct payments to landlords more difficult to access puts the most vulnerable tenants at greater risk.

“Without the confidence to let to tenants in receipt of Universal Credit, landlords will turn their backs on this sector and a time when there is a record number of people in receipt of Universal Credit and rising unemployment as a result of the global pandemic, we should be doing all we can to help make managing finances easier.”

8 COMMENTS

  1. It didn’t take a minute for my tenant to stop paying 3/4 off his rent as soon as it was mentioned by the government take a further amount of licenses insurance and incidentals and what is left nothing. Knowing my tenant as I do he will never catch up with his payments why did I bother

  2. I’m a landlord with 20 properties all my tenants are on Universal Credits and seven out of the ten are in serious rent arrears. I am currently seeking evictions for four due to none payment of rent and the other three will soon be in the same situation due to mounting rent arrears. The uc47 is hopeless when tenants refuse to cooperate. All my application have been ignored by Universal Credits and all my attempts to chase up applications have been a total waste of my time. I have no option but to evict and stop renting properties to people who are on UC.

  3. This is the reason why many landlords will not let to potential tenants on benefits .Its just too much of a risk. Tenants know if they are evicted and have children they will be rehoused no sanction and the cycle continues.

  4. When will MP’s learn that the majority of private landlords are not prepared to risk taking tenants who are on Universal Credit unless direct payment of the housing allowance is automatically made to the landlord. The housing allowance has a clear purpose, which is to pay the rent with. Regretfully many tenants who rely on benefits often use the housing funds to support other activities (legal or not) and the private landlord loses out every time. At a time when homelessness is on the rise, MP’s should be looking at ways to encourage private landlords to assist people on benefits, but instead all they are doing is driving good private landlords out of the business through over regulation and by sticking to failing policies such as this one.

  5. Everyone – I know it may hurt short term but do not rent to UC. If we all do that – the system might get changed. This problem is not the only reason already dont. Claw back is another. In arrears not in advance is another. Low Housing element / Top up another. The Government has declared war on us. Time to fight back!

    • I agree with the principle of sticking together. Sadly I fear that if we join forces to do this then the government will foist some form of compulsion legislation upon us which may well be worse in the long run. Best to not take on benefits claimants but stay quiet about it.

  6. As ever the Government using the most spurious of arguments to throw the penalty for the non payment of rent onto landlords, another way in which to save the revenue money, for with the excess cash received by tenants who then fail to pass this on to their landlord, the money therby saved will be spent by the defaulting tenant, thus incurring additional VAT receipts and taxable income for the movement of this money, in the meantime landlords who are unable to obtain repossesion of their properties due to the abysmally slow court procedures and legislation designed to keep non paying tenants in their rented property for the absolute maximum time.

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