Press release

Freud: Universal Credit protection for tenants and landlords

Protection for renters claiming Universal Credit and their landlords was announced by the Minister for Welfare Reform Lord Freud.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

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Protection for renters claiming Universal Credit and their landlords was announced today (27/06/13) by the Minister for Welfare Reform Lord Freud.

Speaking at the Chartered Institute of Housing Annual Conference in Manchester, Lord Freud outlined the support for Universal Credit claimants who will receive direct housing payments, how DWP will work with social landlords to identify tenants who should be exempt and when action will be taken if tenants fall into arrears.

Lord Freud said:

Letting claimants pay their own rent is an important way of breaking down barriers to help people into work.

I believe that these measures strike the right balance between ensuring that both the tenant and landlord are protected, but also gives individuals some time to get to grips with direct payments.

Three levels of protection will exist:

  • Decisions about whether tenants should receive direct payments will be made in collaboration with social landlords
  • If arrears build up to the equivalent of 1 month’s rent the decision to make direct payments will be reviewed
  • If arrears reach the equivalent of 2 months rent, the claimant will have housing payments switched to the landlord, or managed payments

Lord Freud added:

The key to making direct payments work will be our on-going collaboration with landlords, but I am determined that managed rent payments should not be a permanent solution.

Once arrears have been paid, we will look to return tenants to direct payments, with the right support in place.

Once arrears have been cleared, the DWP will work with landlords to return tenants to direct payments. In most cases, following the tenant being offered budgeting support, they will return to direct payments within 6 months of the arrears being paid off.

These safeguards were developed following findings from the Direct Payment Demonstration Projects that are currently running in 6 areas across Britain.

More information

Universal Credit will replace Income-based Jobseeker’s Allowance, Income-related Employment and Support Allowance, Income Support, Working Tax Credit, Child Tax Credit, and Housing Benefit.

When a claimant starts work, Universal Credit will be steadily withdrawn as their income increases.

Ashton-under-Lyne is the first Jobcentre to take claims for Universal Credit on April 29 with Wigan, Warrington and Oldham Jobcentres taking claims for Universal Credit from July.

The roll-out of Universal Credit will be completed across the UK by 2017.

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Published 27 June 2013