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Universal Credit rent arrears deductions suspended
The process for paying back rent arrears through Universal Credit deductions has been suspended, the Department for Work and Pensions (DWP) has confirmed.
Third-party deductions – which see Universal Credit claimants have money they owe taken directly from their monthly benefit awards – have been halted until 10 May.
The move is intended to help streamline the Universal Credit system amid huge demand arising from the impacts of the coronavirus crisis.
Deductions for rent arrears, service charge arrears and council tax arrears will not be taken during the pause.
Claims in which rent is paid directly to landlords through Alternative Payment Arrangements are not affected by the change.
A spokesperson for the DWP told Inside Housing: “We have received an unprecedented number of new benefit claims and have streamlined our operations to make sure people get the support they need during this time.
“As part of this, we have temporarily paused third-party deductions from [Universal Credit] – these will recommence on 10 May.
“We are in the process of explaining the changes to claimants via their online journal and to third parties, including housing providers who collect arrears via this method.”
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Some 1.5 million people have applied for Universal Credit since mid-March – several times the typical volume over that period – due to job and income losses resulting from the economic impact of COVID-19.
Applications for new deductions have also been suspended.
Third-party deductions are intended to be a safety net to help people who are facing potential enforcement action when struggling to pay back debts for essential bills, such as rent.
Sue Ramsden, policy leader at the National Housing Federation, said the suspension “will help ease the immediate financial pressures for people on low incomes”, but she added that the service “does still form an important role in helping people manage their debt in the longer term”.
Jeremy Hewer, policy lead at the Scottish Federation of Housing Associations, said it is “disappointing” that the DWP has not given more notice of the change, “which would have allowed landlords to engage with those affected and to make voluntary arrangements wherever possible”.
The third-party deductions pause is the latest tweak to Universal Credit amid the pandemic, after the DWP announced it was suspending the recovery of overpayments.
Ministers have also raised the Universal Credit standard allowance by £20 a week for the next 12 months.
But welfare delivery minister Will Quince told the Work and Pensions Select Committee last week that acting on calls to scrap the five-week wait for new Universal Credit payments “is not operationally deliverable”.
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