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Landlord and property

Universal Credit


Introduced in October 2013, Universal Credit is a new benefit that has started to replace the 6 existing benefits with a single monthly payment for people who are looking for work, or who are on a low income.

### By 2017 Universal Credit will replace:

Any new claimants since October 2013 have automatically been accepted onto the Universal Credit scheme, which is managed by the Department for Work and Pensions.

The intention behind the new system is to promote the idea of tenants managing their own finances, and to bring the benefit system in line with the conditions affecting working people.

Main differences between Universal Credit and the current system

## ### ## Landlord concerns

This new system raises some concerns for landlords since it affects local authority tenants, housing association tenants, and tenants in the private rental sector.

What can landlords do to mitigate risks?

Landlords can take out protective measures such as:

Can a landlord be paid directly?

In some circumstances, the landlord can be paid directly. However, each case will be looked at on an individual basis and will be subject to a screening process combining financial and vulnerability risk factors.

Direct payment appeal process:

Referrals

This includes self-referral. Referrals can be made by advisers, such as the Citizens Advice Bureau, and third parties, such as landlords.

Screening

Only claimants who have ‘reasonable grounds’ for exceptional payment arrangements will be considered.

Decisions

Final eligibility decisions for payment exceptions will be taken by a member of staff on a case by case basis. One of the possible outcomes may be a decision to pay rent to the landlord directly.

Review

Payment exceptions will be on a time limited basis, over time moving claimants to a point where they can manage themselves.

As with the existing system, Universal Credit will permit deductions to be made from benefit entitlement for rent arrears. This is intended to be a last resort. Rent arrears and mortgage arrears will be prioritised in deductions.

Qualifying for the deduction of rent arrears

The claimant must:

Where the above applies, a monthly deduction from the Universal Credit benefit could be paid directly to the landlord, if the Department of Work and Pensions deems appropriate.

The deduction will be no more than 5% of the standard allowance and will stop if the claimant’s income reaches a certain level for 3 months.

To keep up-to-date with information regarding Universal Credit, please visit the government website.