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This publication is available at https://www.gov.uk/government/publications/universal-credit-and-rented-housing--2/universal-credit-and-rented-housing-guide-for-landlords
This document provides private and social sector landlords with information about Universal Credit to help them understand what they can do to help their tenants prepare for:
- their move to the single Universal Credit benefit payment
- making direct payments of their housing costs (rent) direct to their landlord themselves
It explains how Universal Credit will ensure that the appropriate protections and safeguards are in place – both the trigger points for intervention by the Department for Work and Pensions (DWP) and recovery of arrears where they occur.
It also explains what budgeting and payment support is available for tenants who may need help moving to the new system.
This includes alternative payment arrangements if claimants are finding it hard to manage their Universal Credit payment and pay their landlord themselves.
Universal Credit is being introduced in stages across Great Britain by postcode area.
There are 2 types of Universal Credit services:
- Universal Credit full service
- Universal Credit live service
1.1 Universal Credit full service
Universal Credit full service is available to all types of claimants in certain areas of Great Britain. You can identify a full service area if it has an asterisk (*) in the list of jobcentre areas where Universal Credit is available to couples and families.
Universal Credit full service claimants will have an online Universal Credit account to manage their claim. They will use their account to report changes, send messages to their work coach and find support.
1.2 Universal Credit live service
Universal Credit live service is available to:
- all single people across Great Britain, who are not in a full service area
- couples and families with children who live in an area without an asterisk (*) in the list of jobcentre areas where Universal Credit where couples and families can claim Universal Credit.
Universal Credit live service claimants will manage their claim by telephone.
Live service claims will eventually move to the full service. Universal Credit live service claimants will be notified when this will happen and what they need to do at that time.
2. Universal Credit payments and helping tenants prepare
2.1 Universal Credit payments
In most cases Universal Credit will be a single, monthly payment which is paid in arrears directly into the claimant’s bank account. Payments will include all eligible housing costs.
This means that claimants will be responsible for paying their rent themselves.
Couples living in the same household will get one monthly payment between them, this can be paid into a joint account or a single account in either person’s name.
Any other adults living in the same household who are claiming Universal Credit will be paid separately.
2.2 Help with housing costs under Universal Credit
Universal Credit payments are made up of different amounts depending on the claimant’s individual circumstances.
The Universal Credit additional amount for housing costs payment helps tenants with their eligible rent and service charge costs. Regulations state that claimants must satisfy 3 conditions – payment, liability and occupation – to qualify for help with their housing costs.
In the majority of cases DWP will pay eligible housing costs directly to the claimant as part of the single Universal Credit payment.
2.3 Private sector tenants
For private sector tenants, their Universal Credit additional amount for housing costs will be whichever is lower out of their actual costs or the Local Housing Allowance rate.
2.4 Social sector tenants
For social sector tenants, their Universal Credit additional amount for housing costs will be their actual housing costs. This cannot include service charges that are not covered by Universal Credit or charges for utilities, such as water or electricity.
If a social sector tenant claimant has any under occupied bedrooms, their additional amount for housing costs will be reduced by:
- 14% for one spare bedroom
- 25% for two or more spare bedrooms
2.5 Protection for social and private sector landlords
There will be improved protection in place for landlords and tenants against arrears under Universal Credit.
In the legacy benefit systems e.g. JSA and ESA, many landlords in the social rented sector receive their housing cost payments directly from their local authority.
Universal Credit will be a single, monthly payment (including eligible housing costs) paid directly to claimants.
Social landlords may need to look at how and when they collect their rent, and the level of support some tenants will need to make the transition to a single, direct monthly payment.
As a landlord you can get ready for Universal Credit by:
- familiarising yourself with the changes
- considering how you might need to adapt your policies and processes
- engaging with your tenants early, to start assessing their needs, making sure they understand their responsibilities and the support available
Most private sector landlords won’t see any change with the introduction of Universal Credit.
This is because most working age claimants in the private rented sector are already used to receiving their Housing Benefit/Local Housing Allowance payments directly and are responsible for paying their rent to their landlord.
DWP encourage those private sector landlords who currently receive a managed payment from the local authority to familiarise themselves with the changes and look at how they can prepare themselves.
Get local information and advice by contacting your regional partner manager for specific advice and guidance.
Providers of supported exempt accommodation won’t see any change as their residents will have help with their housing costs provided separately to Universal Credit, and will be able to continue to receive Housing Benefit.
2.6 Helping tenants prepare for Universal Credit
Landlords can help tenants to get ready for Universal Credit by encouraging them to:
- go online
- open a bank account to receive payments
- read the Universal Credit and you guide
Universal Credit is designed to be claimed online, if tenants don’t have access to the internet or are not confident using a computer, the jobcentre can tell them about local services that can help.
Universal Credit will usually be paid monthly in arrears into a single account, so setting up a direct debit or standing order may help them to do this. Tenants should also use the Universal Credit Personal Planner which checks what changes they may need to make to get ready for Universal Credit.
All claimants receive the Universal Credit and you guide when they make a Universal Credit claim to help support them through the changes. You can use this as a basis for conversations with tenants.
2.7 Support to help tenants with budgeting
A number of safeguards are in place to support tenants and help them manage their money. Budgeting support will be offered when claimants first receive Universal Credit.
This support can be money advice or, depending on their individual circumstances, an advance of benefit.
A claimant can ask for a Universal Credit new claim advance if they’re in financial need and can’t manage until their first monthly payment of Universal Credit. This will be a proportion of the full payment and will be recovered over a period of time.
Alternative Payment Arrangements will be available in some circumstances for claimants who genuinely can’t manage their monthly payment.
This might mean having a managed payment made to their landlord, a split payment, or a more frequent payment.
More information about Support and Alternative Payment Arrangements.
Information about how Universal Credit is calculated.
3. Paying rent
3.1 Ensuring that rent is paid
Claimants will be expected, where possible, to arrange their own rent payments as they would if they were in full-time work.
Landlords need to think about how this will fit with their own payment calendars. If landlords have previously received a managed rent payment from the local authority, they will need to speak to their tenants to agree arrangements for collecting rent from them.
In a minority of cases Alternative Payment Arrangements can be put in place to support claimants.
Find out about Budgeting Support and Alternative Payment Arrangements.
3.2 First Universal Credit payment
Universal Credit is assessed monthly and paid monthly in arrears. The first payment will usually be received 1 month and 14 days after they submit their claim.
3.3 Paying rent while waiting for their first payment of Universal Credit
Many new claimants of Universal Credit will be coming from work and will be able to support themselves in the first month using their final payment of earnings.
However, where needed, a claimant can ask for a Universal Credit new claim advance if they’re in financial need and can’t manage until their first monthly payment of Universal Credit.
4. Evidence requirements and checking claims
4.1 DWP checks on rent and tenancies under Universal Credit
The claimant will be asked to provide the appropriate evidence to support their Universal Credit claim.
If a tenant doesn’t have a copy of their tenancy agreement, DWP may accept a letter from the landlord confirming the current rent and service charges.
4.2 Annual rent changes
Claimants should tell DWP of any changes that might affect their Universal Credit payment, including annual rent changes and changes to eligible service charges.
4.3 Notifying landlords that tenants are claiming Universal Credit
If you’re a social landlord and have a tenant receiving Universal Credit live service and your tenant has made a claim to Universal Credit, you’ll be notified by either a:
- UC179 form – notification to social landlord of a claim to Universal Credit
- UC182 form – verification of housing costs, this is issued to a social landlord if a tenant claims Universal Credit but fails to produce sufficient evidence to verify their housing costs
If you’re a social landlord and have a tenant receiving Universal Credit full service (UCFS) as part of the UCFS housing costs verification process, a form is sent to the claimant’s social rented sector landlord asking for housing cost details. This is also the notification that a claim has been made.
This is in line with the Social Security (Information Sharing in Relation to Welfare Services etc - Amendment) Regulations 2015 that will enable the sharing of limited relevant information with social landlords.
The supply of information and its appropriate use is governed by requirements of the Data Protection Act. Social landlords will have an obligation only to use the information supplied by DWP for its specific intended purposes.
DWP does not inform private landlords that their tenant has made a claim to Universal Credit.
4.4 DWP details not matching the tenant
If the details provided by DWP do not match those of your tenant, you can email firstname.lastname@example.org to let them know as soon as possible. DWP will investigate any anomalies in the information supplied.
5. Calculating rent
5.1 Calculating monthly rent if a claimant’s rent is paid weekly
Universal Credit will be paid monthly. If rent is paid weekly, the monthly rate will be worked out by multiplying the weekly rent by 52, then dividing by 12.
5.2 Other rent payment frequencies
Other payment frequencies will be calculated as follows:
- 4 weekly payments are multiplied by 13 and divided by 12
- 3 monthly payments are multiplied by 4 and divided by 12
- annual payments are divided by 12
5.3 52 week years
Universal Credit will always be calculated based on a 52 week year, unless rent is charged over fewer than 52 weeks.
5.4 Rent free weeks
If rent is charged over fewer than 52 weeks, the monthly payment will be worked out based on the number of weeks rent is charged.
For example, if rent is payable 48 weeks of the year, Universal Credit will be calculated as weekly rent multiplied by 48 and divided by 12.
Tenants should be made aware of any rent free weeks they may be entitled to so that they can notify DWP, this will help to avoid confusion and ensure payments are accurate.
6. Paying for 2 homes
6.1 Universal Credit payments for 2 homes
Support through Universal Credit can be paid on 2 homes if:
- liability for 2 homes has arisen because of fear of violence in the normal home – in this case, both liabilities can be paid for up to 12 months as long as there is an intention to return to the original property
- a disabled person can’t move into a new home because it needs adaptations – in this case the claimant must show that the delay is reasonable and if so, both liabilities can be paid for up to 1 month
Multiple homes can be treated as a single home, for benefit purposes, where a family has been housed in 2 homes because of the size of the family. This is not time-bound.
The Universal Credit additional amount for housing costs can also be paid where someone is not able to occupy their home because of essential repairs, but will only cover either the housing costs of the other accommodation or the accommodation which they normally occupy as their home (not both).
If someone cannot move into accommodation immediately because they are in hospital or a care home then the Universal Credit additional amount for housing costs can be paid on the new accommodation for up to 1 month.
7. Service charges
7.1 Universal Credit and service charges
Any eligible service charges will be paid directly to tenants as part of the Universal Credit additional amount for housing costs payment.
More information about Universal Credit service charges – guidance for landlords.
7.2 Ensuring tenants are aware of what service charges are eligible for Universal Credit
Landlords in the social rented sector are responsible for clearly setting out to the tenant which of their service charges are eligible, in accordance with the eligible service charges regulations and guidance. The claimant will report this as part of their claim.
In the private rented sector, a tenant’s total rent is usually made up of both rent and service charges, which are not separately identifiable.
DWP will not need to collect separate service charge information for the private rented sector group as DWP will pay the lesser of the total rent or the appropriate Local Housing Allowance.
8. Support and Alternative Payment Arrangements
8.1 Alternative Payment Arrangements and managing rent arrears
If a tenant gets into difficulty paying their rent, the landlord can apply for an Alternative Payment Arrangement (APA) Managed Payment to Landlord (MPTL) which will be considered on a case by case basis.
More detailed information about Personal Budgeting Support and Alternative Payment Arrangements.
8.2 Tenant in rent arrears
Information from third parties such as family members, support workers and the claimant’s landlord, can be considered when assessing a claimant’s ability to manage their finances.
Personal Budgeting Support and/or an Alternative Payment Arrangement may be deemed appropriate, for those claimants who are not yet in arrears with their rent but who may benefit from advice around managing their Universal Credit award or money management.
DWP can refer the claimant to Personal Budgeting Support and/or consider an Alternative Payment Arrangement.
8.3 Applying to have the rent paid to landlord (Managed Payment to Landlord Alternative Payment Arrangement)
If you have a tenant receiving Universal Credit you can apply for a Managed Payment to Landlord (MPTL) using the UC47 request forms.
Form UC47: Landlord Request for a Managed Payment or Rent Arrears Deduction from.
More detailed information about Personal Budgeting Support and Alternative Payment Arrangements.
If you’re a social landlord you can also apply for a MPTL as part of the housing costs verification process, either by using the form Universal Credit sends to request housing cost details, or by completing the UC47.
Once the application has been processed the landlord will be advised of the decision. If the application is refused DWP won’t tell you the reason why. This is because of data sharing regulations and claimant confidentiality.
The amount you receive may change from month to month depending on the claimant’s Universal Credit award, usually up to a maximum value of the eligible housing costs.
DWP will notify when the MPTL ceases but we won’t tell you the reason why. This is because of data sharing regulations and claimant confidentiality.
8.4 How DWP pay the managed payment to landlord
For social landlords who have a tenant getting Universal Credit live service, a Bank Automated Clearing System (BACS) payment will be paid into the bank account nominated by the landlord at the end of the claimants Universal Credit assessment period on a monthly basis.
For social landlords who have a tenant getting Universal Credit full service the Third Party Deductions (TPD) Scheme will be used to pay the Alternative Payment Arrangement (APA) Managed Payment to Landlord (MPTL).
Payments from the TPD Scheme are paid 4 weeks in arrears every 28 days. The 28 day TPD payment cycle equates to 13 payments in a calendar year.
Universal Credit payments are paid calendar monthly and equate to 12 assessment periods each year. This means:
- DWP will assess what deductions (e.g. APA MPTL) can be made from Universal Credit payments 12 times each year at the end of each assessment period
- the APA MPTL is paid in the TPD payment cycle following a Universal Credit payment
- when a TPD payment cycle ends before DWP assess what deductions can be made from a Universal Credit payment, then any APA MPTL payment will be paid in the next TPD payment cycle
- 12 APA MPTL will be paid in 12 of the 13 TPD payment cycles
The first APA MPTL payment from the third party payments system is normally received within 6 to 8 weeks from the date deductions commence, for example, from the end of the assessment period in which managed payments commenced.
The MPTL APA is paid on the same day that landlords normally receive any third party rent arrears deductions and will be paid into the bank account nominated by the landlord.
If you have multiple properties with MPTL’s, then you will receive a single aggregated payment for all your tenants on a 28 day cycle and a schedule will be sent to you with a breakdown of all payments.
For Universal Credit full service tenants DWP will use the landlord’s creditor reference number to pay both rent arrears and the managed payment APA to the landlord.
Payments will be shown as individual transactions, and will include an identifier to show whether the payment relates to rent arrears (RA) or APA (MPTL) payment. A remittance note will be sent to the landlord which shows how the payments have been broken down.
When a managed payment APA or rent arrears deduction is paid through third party deductions, their claimant/tenant reference number will be annotated at the end with either:
- RA for rent arrears payments
- MP for managed payment
The claimant or tenant reference number shown on the Third Party Payment schedule are 18 characters.
To help with identification of the 2 types of payments, the tenant reference number is 16 characters long, allowing for the RA or MP suffix.
If you have any queries relating to your Third Party Payment schedule you can contact the third party payments contact centre.
Third party contact centre
Telephone number: 0345 600 2859
(Monday to Friday, 8am to 6pm)
For private landlords, a Bank Automated Clearing System (BACS) payment will be paid into the bank account nominated by the landlord at the end of the claimants Universal Credit assessment period on a monthly basis.
8.5 Enquiring about a managed payment
If you have a tenant receiving Universal Credit live service
Questions, queries or non-compliance issues about a specific live service case from a Local Authority, landlord or third party acting on behalf of a claimant can be raised directly with the Universal Credit Service Centre by:
- telephoning: 0345 600 0723
- emailing email@example.com
This email address is for use by landlords to escalate issues related to APAs and rent arrears payments.
If there is a threat of eviction landlords are asked to note the subject field accordingly ‘Potential Eviction’. It must not be used for new APA requests, or for raising any other issues.
Enquiries noted as potential eviction will be cleared within 24 hours. All other enquiries will be cleared within 5 days.
Advice about what information DWP can disclose to landlords about their tenants can be found in the document, Universal Credit: Housing Costs and Disclosure.
If you have a tenant receiving Universal Credit full service
In the first instance the landlord should engage with their tenant about the issue.
The tenant has access to their own information via their online account. They can share the information from their account with their landlord, or other representative if they wish to as this contains information about housing payments made.
If more assistance is required the claimant can ask via the journal, face to face or telephone the service centre and provide explicit consent to share their personal information with their landlord or other representative.
When contacting Universal Credit the claimant’s representative will be asked to confirm their identity so the case manager can speak to the landlord direct.
If you are unable to engage with your tenant you can contact the following number 0345 600 4272
If you have any more questions contact your regional partner manager.
You can provide feedback on the service you have received by using the online complaints service.
Although the portal home page refers to JSA and Universal Credit customers, there is an agreement that landlords can also use the portal to comment or make a complaint.
8.6 Changes which may affect the managed payment to landlord (MPTL) APA
When a claimant changes address the MPTL APA will cease from the end of the assessment period before the claimant changed address.
Universal Credit can only make deductions in respect of rent arrears for a debt owed on the claimant’s current address. If the claimant changes address any deductions being made will cease. A notification will be sent to the landlord where the Managed Payment has ended.
Whilst a MPTL is in effect the landlord must notify the department of any changes which a landlord can be reasonably expected to know which might affect the claimant’s entitlement to:
- Universal Credit
- the amount of Universal Credit awarded
- the continued payment of Universal Credit
If the MPTL is overpaid due to a change that has not been reported by either the claimant or the landlord, the landlord may be asked to repay the overpaid benefit.
8.7 More frequent payment Alternative Payment Arrangement – paying Universal Credit more frequently than once a month
More frequent payments are one of the options that will be considered if a claimant is having difficulty budgeting. The claimant should contact DWP to be considered for an Alternative Payment Arrangement.
They will also be offered personal budgeting support money advice.
More detailed information about Personal Budgeting Support and Alternative Payment Arrangements.
9. Recovering rent arrears from a Universal Credit claim
Arrears of rent and service charges for the property the tenant is currently living in are included in the list of deductions that can be made from a Universal Credit payment.
If your tenant has accrued rent arrears to the value of two month’s rent or more, you can request a third party deduction to recover the rent arrears using the Request for a Managed Payment or Rent Arrears Deduction from.
The maximum rate at which deductions for rent arrears can be made is 20% of the Universal Credit standard amount.
The rate used will depend on the claimant’s circumstances. Only the claimant can request a change to the percentage rate by contacting Universal Credit.
9.1 How DWP will pay rent arrears deductions to the landlord
If approved, rent arrears deductions will be paid under the third party deduction (TPD) Scheme.
Once payments are set up on the third party payments system, you will normally receive payment every 28 days and will be 28 days in arrears.
The first payment is normally received within 6 weeks from the date deductions commence.
A Bank Automated Clearing System (BACS) payment will be paid into the bank account nominated by the landlord.
A third party payment schedule will be sent to you with a breakdown of rent arrears payments. Payment schedules are issued by post unless you are set up to receive electronic schedules.
For details of how to receive payment schedules, an information pack or further information about electronic schedules (EDI) e-mail: firstname.lastname@example.org
Get local information and advice by contacting your regional partner manager.
10. Budgeting support
10.1 Budgeting support available from DWP
Personal Budgeting Support can be offered to anyone claiming Universal Credit. Claimants needing help with monthly budgeting will be identified through conversations with their Universal Credit work coach or by others providing support.
Many claimants will be able to help themselves through the online budgeting support services that are already available via their Universal Credit account.
Universal Credit has made funding available to Local Authorities (LA) and partners to ensure that face to face budgeting support is available locally to help the most vulnerable.
All claimants who have need of an Alternative Payment Arrangement will be offered Personal Budgeting Support money advice.
Landlords should make themselves aware of the local Personal Budgeting Support money advice providers. The LA revenues and benefits team or DWP regional partnership manager can provide this information.
More information on budgeting support if you live in rented accommodation (or if you have tenants) can be found on the Money Advice Service website.
They have an online money manager support tool which provides free and impartial budgeting information and advice based on your (or your tenants’) personal circumstances.
11. Discretionary housing payments
Universal Credit claimants can contact their local authority and apply for a discretionary housing payment.
This payment gives the claimant additional financial support so that they can meet a rent shortfall or other housing costs. The decision on whether to award a discretionary housing payment rests with the local authority.
12. Specialist accommodation needs
12.1 Universal Credit and supported housing
Residents of supported exempt accommodation will have help with their housing costs provided separately to Universal Credit and will be able to continue to receive Housing Benefit in the short term.
DWP, working with DCLG are developing a localised top-up scheme to meet the needs of supported housing providers and their tenants from April 2019.
12.2 Universal Credit and temporary accommodation
Universal Credit live service claimants living in temporary accommodation are prevented from claiming Universal Credit in the live service areas by the legislative gateway and so will need to claim other benefits.
If a Universal Credit full service claimant is living in temporary accommodation they will receive the Universal Credit additional amount for housing costs based on the relevant Local Housing Allowance rates for the household size, including the shared accommodation rate for single people.
The list of jobcentre areas where Universal Credit is available to couples and families also provides details about where the full service is delivered.