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  • LHA/Universal Credit

    UC Payments Direct & 2 week bonus!

    Morning Tribes

    Some of you may already be aware, but from the 11th of April 2018 two significant changes took place, in relation to Housing Benefit (LHA) and Universal Credit. Both beneficial, for a change!

    Two week run-on!

    Firstly, there’s now a Housing Benefit “bonus” of an additional 2 weeks payment, during the tenant’s transition to Universal Credit. The new arrangement is instigated by your tenants’ need to claim Universal Credit in a Full-Service area (UCFS). Initially, this is most likely to apply to a tenant who has a change in circumstances. For example, the tenant becomes unemployed, submits a sick note, stating they’re unfit to work, a single parent moves from Income Support, due to their youngest child becoming 5, or the tenant moves address. In each case, this would prompt a claim to UCFS.

    In addition, from the summer of 2019, when DWP starts, what it refers to as the “managed migration” period, existing HB/LHA claimants, in receipt of JSA, ESA, Income Support & Tax Credits, will be moved or forced over to claim UCFS and should all become eligible for the bonus payment.  

    The extra 2-week payment should be paid automatically and is triggered when the local authority receives a “stop notice” from DWP informing them that the tenant has been transferred over to UC. If HB/LHA is currently being paid direct to the landlord, then the extra payment will ordinarily be paid to the landlord as well. However, where the move to UC is caused by a “change of address” payment will be made to the outgoing tenant, even where the landlord is currently receiving “direct payments”. The Residential Landlords’ Association has already noted its opposition to this, believing payment should be made to the landlord, especially where rent arrears exist.

    DWP reckon 2.3 million tenants will benefit from the new rule to the tune of £233 on average. For those in work, who receive HB/LHA, there could be an additional bonus as the level of their award will not be “means-tested”, resulting two weeks at the “eligible” rent level.

    “Housing Element” of Universal Paid Direct to Private Sector Landlords

    Again from 11th April, the “Housing Element” can be paid direct to landlords who were accustomed to receiving LHA “safeguarded payments” for tenants. The RLA, Property Tribes, Caridon Landlord Solutions, have led the fight on this for the past 5 years, and it must be very satisfying to see all their efforts coming to fruition. The move makes perfect sense, is long overdue and will hopefully stem the tide of PRS landlords refusing to provide accommodation to tenants receiving Universal Credit.

    DWP has issued guidance to claimants explaining:

    “Private landlords can ask for their tenant’s Universal Credit housing costs to be paid directly to them without the need for explicit consent. You will be informed that the private landlord has requested that the Universal Credit housing costs be paid directly to them. If you are happy for your Universal Credit housing costs to be paid directly to the landlord, you do not need to reply to give your consent. The Universal Credit housing costs will then automatically be paid to the landlord each month.

    DWP has, just the other day, confirmed that the tenant’s “Work-coach” or “Account Manager” can trigger payment to the landlord without the need for a UC 47 application.

    If you do not want the rent to be paid directly to the landlord, you can dispute this. You will need to provide evidence that you are not in rent arrears in order to dispute the alternative payment arrangement.

    Once the direct payment to the private landlord (the alternative payment arrangement) has been set up, the following information can be disclosed to the landlord:

    •            the start date of your housing payments being paid to the landlord

    •            when the landlord can expect to receive the first payment

    •            the amount of the next payment of your Universal Credit housing costs

    •            if there have been any changes to the Universal Credit housing costs (the reason for the changes will not be provided or discussed).

    A private landlord can act as a representative for a claimant but will always need your explicit consent to do so, unless it is for the specific purpose of requesting an Alternative Payment Arrangement (APA).”

    Whether what’s been promised will work in practice remains to be seen. I’d be interested in hearing from landlords who encounter difficulties with either of these changes. For those of who are members of my website http://www.ucadvic.co.uk I’ve created more detailed information on this and other topics like: How to challenge a decision; How to ask for a Mandatory Reconsideration; How to Appeal; How to complain to DWP and the Independent Case Examiner (ICE) with standard letter templates and forms to assist.

    If you require any further info on this or any other welfare reform topic, please get in touch via bill@ucadvice.co.uk or the website contact facility.

    Bill Irvine

    UC Advice & Advocacy Ltd

    01698 424301 or 07733 080 389

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    What would solve the UC problem is this paragraph  on a UC form.

    This would be a special sub-section that would need to be signed by a tenant and witnessed by a 3rd party with no interest in the signing

    I the tenant do hereby give my full consent to my full contractual rent being removed first from the total of any benefits I may receive and to pass that rent payment directly to the LL.

    I also consent to that rent increasing subject to relevant legal processes being adhered to by the LL to obtain such increases.

    I also accept that I retain full liability for any payments made direct to the LL and that if any benefit  payments are required to be repaid as a consequence  of incorrect information  I may supply for and during any claim that the LL will not then be subject to any 'clawback'.

    Now if every UC tenant had these clauses signed  many; many LL would be queuing  up to take on UC tenants!

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    Hi Paul

    Simply adopting the LHA safeguarding guidance and the landlords’rights of appeal would have remedied most of the current problems. The overpayment ‘claw-back’ issue is overstated. Most landlords who challenge recovery will succeed as long as they’ve not contributed to the overpayment.

    But let’s focus for a minute on the fact the changes should be beneficial.

    Bill


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    Oh listen little by little your sterling efforts  along with others is gradually  changing the situation.

    What has been achieved  of late to improve the UC process has been remarkable.

    Sometimes things that put LL off are a matter of perception .

    Clawback unfortunately  is a massive risk which is why I have always refused amongst many other reasons  to take on HB tenants.

    The liability  should ALWAYS remain with the tenant unless it could be proven that the LL was complicit  in assisting the origination or continuance of a false claim

    I believe Scotland  allows direct payment of UC.

    The biggest problem bar none though is the HB element being calculated last within  the OBC..

    Direct payment is all very well in safeguarding circumstances  but it is of little use if the HB element was reduced to £0.50pw due to the OBC.

    The FULL contractual rent should be deducted  and paid to the LL first within the OBC.

    If that means that paying rent first means the tenant has no money remaining  from their other benefits within the OBC that is just TOUGH!

    Tenants can then choose to reduce rent costs by moving somewhere cheaper or they might even consider  working at least 16 hrs per week to avoid the OBC thereby enabling them to continue their welfare lifestyle.

    The fundamental  point here to persuade  LL to take on HB tenants is the LL must be guaranteed  to be paid first out of UC the full contractual rent with almost no chance of 'clawback'

    If tenants refused to sign the additional  clauses I have suggested then most LL would refuse to let to them.





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    Yes the rent getting capped first is a big problem.

    If the cap was spread across all the T benefit payment elements that would at least be a step forward - maybe that is the next thing to campaign for?

    ( can't see rent getting capped last happening unless RSL evictions rocket under UC)

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    DISCLAIMER just my personal opinion - for legal advice consult a qualified professional grown-up.

    Paul

    In London especially, the OBC is undoubtedly a big issue, but in the scheme of things, affects only 6% of HB/LHA recipients.

    Furthermore, since the LHA scheme was introduced in April 2008 the numbers of landlords renting to LHA/UC tenants has risen, not fallen, and accounts for 35% of the overlall HB bill, which amounts to circa £25 Billion in 2017/18.

    Could we focus on what my post is about - two positive changes!

    Bill

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    Oh listen I fully concur with your enthusiasm for the changes that have occurred.

    Unfortunately  such changes still remain insufficient  to attract LL to the UC offer.

    Doing as  I suggest would encourage LL to take on UC tenants.

    So keep up the good work

    Eventually sanity will return and I reckon my conditions  will be applied.

    But it will take a few more years and a lot more work on your part!!

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