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DWP considers Universal Credit amendments after concerns about ‘53 week’ year
The government is considering amending the way it calculates rent allowances for social housing tenants claiming Universal Credit.
In a newsletter sent out to landlords yesterday, the Department for Work and Pensions (DWP) said it recognises there is an issue with the way Universal Credit regulations calculate how much housing costs are owed to those paying their rent weekly.
The announcement represents a U-turn from the DWP – which had previously rejected calls to tweak Universal Credit regulations to account for the fact that many social landlords charge rent weekly, while the benefit is paid monthly.
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The bodies argued that because there will be 53 Mondays in the 2019/20 rent year, many social tenants will be required to pay 53 lots of rent – while the Universal Credit system would only account for the usual 52 weeks, leaving tenants a week short.
But the DWP had insisted it had “no plans to amend the regulations for assessing housing costs”, claiming that to do so “would be complicated and lead to confusion”.
In the newsletter, the department maintained that of the extra week’s rent paid by Universal Credit claimants in 2019/20, five days will fall in the following year – essentially representing an advance for the following month when four rent payments are due and the tenant will receive the same award as any other month.
“The combination of the advance rent payment and the ‘overpayment’ in April 2020 means that the shortfall is immediately recovered,” it said.
However, it added: “The department has recognised that there is a separate issue with regards to the way the calculation in the Universal Credit regulations converts a weekly liability into a monthly allowance.
“The conversion is achieved by multiplying the weekly rent by 52 and then dividing by 12. This effectively means one day’s rent a year (2 days in a leap year) are not covered by [Universal Credit].
“We are currently considering whether this formulation around weekly rents, and potentially other weekly amounts in the [Universal Credit] calculation, should be amended.”
Will Atkinson, policy and programmes manager at CHC, said: “We welcome the commitment from the Department for Work and Pensions to work towards solving the 53-week rent year issue, ensuring that Universal Credit claimants living in social housing receive full support for their rent next year.
“The housing benefit system was designed to ensure that people on low incomes can afford to pay their rent and its replacement, Universal Credit, is currently failing to cover this basic requirement or tenants.
“CHC has proposed that the Universal Credit regulations should receive a small amendment, ensuring that the 53rd week’s rent is covered by monthly Universal Credit payments, and we are working with the department to discuss how this can be implemented.”
Catherine Ryder, head of policy at the NHF, said: “It is a big step forward that the Department for Work and Pensions has finally acknowledged this oversight, which has the potential to leave thousands of residents a week short of rent through no fault of their own.
“The solution is simple and we hope that this will now be resolved once and for all so that residents on weekly tenancies will not suffer unnecessary.”
Today’s letter also revealed that more than 50% of new Universal Credit applicants in social housing get details about their housing costs wrong when filing their claim, leading to delays in payments.
