Rental money to be paid to tenants after Universal Credit comes in

Rents will still be paid to tenants under Universal Credit

Rents will be paid direct to housing benefit tenants in private rental accommodation, rather than to landlords, once Universal Credit comes in – despite fears voiced in Parliament that tenants will run up large arrears.

The concerns were raised by a Labour MP, Alex Cunningham, who represents Stockton North, but benefits minister Iain Duncan-Smith said that tenants on benefits could no longer be treated like children.

The Residential Landlords Association, together with organisations such as Shelter, has consistently lobbied for choice with Local Housing Allowance – the benefit currently paid to claimants in private rental accommodation.

Both organisations say that tenants should have the choice as to whether the benefit is paid to them, or their landlords, and that this choice should extend to the new Universal Credit. So far, the lobbying has proved unsuccessful.

This month’s Parliamentary exchange went as follows:
 
Alex Cunningham MP: As other hon. Members have mentioned, the introduction of Universal Credit will mean that housing benefit will be paid not directly to landlords but to tenants, and that it will be paid monthly rather than fortnightly, causing tenants to go into substantial arrears.

Does the Secretary of State agree that, when assessing whether a claimant is vulnerable enough to be exempted from monthly payments and receiving their housing element directly, it should be standard practice to consider the feedback of third parties such as social services and voluntary sector services as well as claimants?
 
Iain Duncan-Smith MP: I do, yes. We want to pay people directly, and we already pay local housing allowance to such tenants directly, which the hon. Gentleman and all hon. Members should remember. The vast majority cope with that payment – they are very similar.

The point is this: we do not intend to cause problems, but the more we continue to treat people in receipt of benefits like children, the less likely they will be able to cope when they go to work.

Those who can, absolutely must get on to that payment schedule, but we will obviously talk to all the bodies to which he referred to ensure that we identify those who cannot. If people cannot get on to that schedule, we want to surround them with help and support to find out why they cannot manage their payments, and to rectify that rather than just throw money at them.