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Some time ago now, we had a very lively thread concerning - who exactly could receive payments of Universal Credit? The thread focused on the services of one private company which was promoting itself as a form of silver bullit i.e. a way overcoming the problem of DWP making payments of "housing costs" direct to tenants. The company concerned was already receiving LHA payments from councils and had confirmed to exisitng clients (and potential users of its services) it could deliver the same services in respect of UC.
I raised doubts about the company's ability to deliver its claims, which were based on my understanding of the law relating to Universal Credit (Claims & Payments) Regulations 2012. Since then I've become aware of at least another 2 companies, which have been peddling a similar theme to housing associations as well as PRS landlords and agents. A few of the Associations wrote to me seeking clarification. In turn, I wrote to DWP and only yesterday received DWP's response, reproduced below:
"You also asked in a previous email about payment of Universal Credit into the bank account of a private company. Our policy and legal colleagues have confirmed that legislation does not allow for such payments. In these circumstances, where a claimant is looking to a private company to manage their money on their behalf, the claimant can set up a standing order or direct debit to send the money, once received by them, where they like. We do not promote this type of companies or payment arrangements."
It's important to note, this does NOT, in any way, affect current arrangements in respect of Housing Benefit/LHA. It does mean however, that when an LHA tenant transfers to Universal either through a change in their circumstances or through migration to UC's "Live" or "Full Service" payment will, in most cases, simply revert back to the tenant. Obviously, if there are historic rent arrears or issues of "vulnerability" landlords and agents could avail themselves of a "Landlord Managed Payment" - often referred to as an APA.
I hope this note helps to clarify the true position. If you require any further information in relation to this or any other Universal Credit matter, please get in touch email@example.com or 07733 080 389. You could also visit http://www.ucadvice.co.uk
So does a Credit Union count as a company
Presumably providing an account is in the tenant's name then UC payments may be made to it.
Clearly the DWP will not make payments to third parties
Tasker Payments I believe was a sort of company that facilitated such payments though I cannot remember their actual methodology
Might this be one of the companies?
I thought Tasked set up an account in the name of the tenant etc, though this is just pure supposition on my part never having used Tasker.
My post was addressing the earlier thread and suggestion a particular company could routinely deliver payments to landlords just as it does just now for LHA. Clearly, it can't.
Credit Unions are charitable, not-for-profit bodies and having been approved by DWP, can indeed receive payments of Universal Credit and offer the "jam-jar" facilities, including making payments to landlords. Credit Unions also offer a range of other related services to its members, including offering access to cheap loans, money advice etc.
As the DWP statement makes clear, private companies do not fit the specified criteria so can't receive payments. I know for a fact, 2 of the companies have already received payments on behalf of UC claimants. DWP have told me this was a mistake based on a belief they were Credit Unions. Now that they're aware of the facts there should be no repeat.
I trust this clarifies the situation.
Perhaps UC will be taken as an opportunity for HB tenants to use Credit Unions
As you suggest they are an efficacious method for tenants to manage their monies
Credit Unions could be life changers for such HB tenants most of whom live feckless lifestyles
Plus the added advantage of LL being removed from 'clawback' possibilities!
Many of my social & private clients have been using CUs for years, partly for the reasons you've mentioned and the fact they're funds are Government protected.
Perhaps this CU methodology could be a way to convince LL to take on HB tenants.
There are the many known advantages of using CU but it seems not many LL or tenants are aware of how effective they could be for both parties.
Perhaps the DWP and councils etc could make CU usage known to tenants and LL alike.
It could be the persuader for LL to take on DSS tenants.
Even I might be persuaded of such
The only issue is that a tenant could cancel the CU process and require UC is paid to them directly to another account.
Then the LL is back to an original position which is the reason they usually state no DSS tenants!
Mind you it would have to be a really determined tenant who switched to avoid paying rent
I'm unsure whether a tenancy clause making the tenancy conditional on a CU being used would be an enforceable fair term.
Thank you for sharing your knowledge Bill, it's really good of you and very valuable.
Hi my son was on dla in feb2016 went med then March all benfits stop age April he was 17 so I was liveing on £96. A fortnight that's it then universal credit came into post code so they stop income surport to go into universal joke they do my rent for me but council say I owe £600 how going to take me court