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No solution to Universal Credit rent update issue in time for April increases
The majority of social landlords face the huge administrative burden of processing changes to individual tenants’ rent costs in April, with the Department for Work and Pensions (DWP) saying a sector-wide solution will not be found in time.
The DWP told housing associations in February 2019 that it would tweak the Universal Credit system to allow rent changes to be recorded in bulk on behalf of tenants in time for the new rent year the following April.
But the measures were not put in place in time for rent changes in 2019/20, and most social landlords are now set to be left without a fix for 2020/21 as well.
The news comes as rents are set to increase for social housing tenants across the country in April.
Instead of implementing full bulk rent change uploads for associations, tests with a selection of unnamed organisations will continue with some alterations aimed at reducing the strain for other landlords. The bulk change tests began in August last year.
Major housing associations have previously warned that without the changes promised by government, they could face extra costs that would see resources diverted away from supporting residents on Universal Credit.
The Scottish Federation of Housing Associations (SFHA) described the news as “extremely disappointing” and said the changes would cause “stress and anxiety” for residents and a “protracted administrative headache” for social landlords and the DWP.
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The DWP requires individual claimants to declare changes to their rent and service charges in their Universal Credit online journals.
Landlords must then verify changes reported by tenants to ensure they receive the right amount of benefit.
Social housing rents are set to rise across the UK in early April, with 800,000 households in the sector receiving Universal Credit housing entitlement, according to latest official statistics published in November.
A letter sent to landlords this month by Neil Couling, director general of Universal Credit, and seen by Inside Housing, said: “Early testing was positive but this remains a complex feature. This year we will continue a test-and-learn approach to help inform the strategic solution.
“This year we intend to work with a small number of large [social rented sector] landlords in order to test with higher volumes of claimants’ housing costs. We will contact you if you can be part of the test.”
He added: “To mitigate the demand on landlords during this period, DWP will again be taking a risk-based approach and have decided not to request verification in every case.
“We expect this to significantly reduce the number of verification requests landlords receive as a result of the annual rent changes.”
An FAQ attached to the letter said the work “is presenting a number of unique challenges” that mean the DWP is “unable to simply expand the 2019 test functionality to all landlords”.
The system will be changed so that claimants are prompted to update their housing costs in their Universal Credit journal, while the DWP will carry out a “one-off exercise to increase the number of claimants matched to landlords on the portal”. This means these landlords do not have to complete rent change verification manually.
Mr Couling’s letter said “further guidance” will likely be issued to landlords in mid to late March.
Sally Thomas, chief executive of the SFHA, said: “This is extremely disappointing news. By now, there are likely to be over 900,000 households, across Britain, in social rented housing, who will have rent changes in April.
“Inevitably, there will be thousands that will not have their rents changed in time on the Universal Credit system, which will lead to stress and anxiety for them and a protracted administrative headache for both social landlords and the DWP.”
Laura Courtney, policy and external affairs manager at Community Housing Cymru said: “We are disappointed that a timely solution has not been found which avoids the risk of disruption to Universal Credit for Housing Association tenants in Wales.
“We remain committed to working with the DWP to develop an approach that does not place the burden of updating any changes to rent for Universal Credit claimants and social landlords in future.”
A spokesperson for the DWP said: “We are continuing to develop a method of bulk uploading social rented sector rent changes which will allow trusted partner landlords to update their tenants’ rent increases.”
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