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Admin-saving Universal Credit change for social landlords to be introduced next month
Universal Credit systems will be changed so that social landlords receive direct rent payments on the same day that tenants are paid the rest of their benefits from next month, the government has announced.
The change is expected to save housing associations and councils thousands of hours in administrative work.
Some Universal Credit claimants – usually those struggling to pay their rent – agree to have the housing cost element of their benefit entitlements paid directly to their landlords, rather than into their personal bank accounts as is standard.
Currently these direct rent payments, also known as alternative payment arrangements, are paid on a four-weekly basis according to a fixed schedule, while the claimants receive the rest of their benefits on a monthly cycle.
Housing sector figures have complained that this discrepancy leads to confusion for both parties, with social landlords often having to spend hours chasing up the status of rent payments when they come in well after tenants receive their other benefits.
A new “payment alignment feature” will mean the direct rent payments switch to a monthly cycle coinciding with people’s Universal Credit payment dates, the Department for Work and Pensions (DWP) said.
Welfare delivery minister Will Quince said the feature “will help reduce time spent on administration by landlords”.
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Sue Ramsden, policy leader at the National Housing Federation, said it was “great news” that will mean “tenants and landlords will be able to understand immediately if the account is in credit or debt”.
The change – first promised in January 2019 – will be available to all 771 social landlords using the Universal Credit landlord portal, open to those granted “trusted partner” status by the DWP.
Neil Couling, director general of Universal Credit, informed social landlords of the move through the landlord portal on Thursday.
It follows a small-scale trial of the new feature in January, launched in response to requests from housing association representative bodies across Britain.
Most landlords involved in the testing reported that the process was quick and easy and that few claimants needed extra support, the DWP said.
Those not part of the trial will be contacted two weeks before their go-live date and provided with guidance on using the new feature, which DWP said will also mean social landlords can access more payment information through the portal.
Mr Quince said: “Despite the outbreak of COVID-19 and the substantial changes we have introduced as a result, I am delighted we are now in a position to provide the benefits of the payment alignment feature to all social landlords on the Universal Credit landlord portal.
“We have processed an unprecedented 2.5 million claims for Universal Credit since 16 March and the wider introduction of this process will help reduce time spent on administration by landlords and I would like to thank those who were part of the successful trial for their support.”
Ms Ramsden said: “This is great news for housing associations and their tenants. Once rolled out this means tenants and landlords will be able to understand immediately if the account is in credit or debt – this is especially important as more tenants are now having to rely on Universal Credit.
“The National Housing Federation and its members worked closely with DWP on the design of the new system. It’s really positive that DWP has recognised the importance of making this change whilst dealing with significant increases in benefit claimants.”
In February, before the coronavirus outbreak, 876,033 social housing households were receiving the housing element of Universal Credit.
A survey of council tenants on Universal Credit in 2019 found that 27% had their housing costs paid directly to their landlord.
