Welfare Benefits: Rent Arrears

Work and Pensions – in the House of Commons on 14th September 2020.

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Photo of Bob Blackman Bob Blackman Conservative, Harrow East

What steps her Department is taking to ensure that welfare benefits for rent are paid to landlords to prevent rental arrears building up.

Photo of Will Quince Will Quince The Parliamentary Under-Secretary of State for Work and Pensions

As my hon. Friend knows, alternative payment arrangements are already available to enable housing costs to be paid directly to the landlord. We have listened to feedback, and in May we introduced a new online system for private landlords, so that claimants who struggle with managing their money get the right support promptly. Landlords can now request that a universal credit tenant’s rent is paid directly to them online, rather than by email or post.

Photo of Bob Blackman Bob Blackman Conservative, Harrow East

I thank my hon. Friend for his answer. As he will know, it is estimated that 125,000 people are now in rent arrears, with rent not being paid to landlords. Many of those people will be in receipt of either universal credit or housing benefit. What steps can he take to ensure that that rent will be paid to landlords and to prevent spiralling debts that are impossible for people to repay, so that landlords are paid their rent and tenants do not fall into unnecessary rent arrears?

Photo of Will Quince Will Quince The Parliamentary Under-Secretary of State for Work and Pensions

I thank my hon. Friend for that question. He is a passionate and knowledgeable advocate on housing issues, and I always listen carefully to his representations. Alternative payment arrangements such as direct payment to landlords can be requested by the tenant, landlord or work coach, but if there is more that we can do, I am happy to explore it. I regularly meet my counterpart at the Ministry of Housing, Communities and Local Government to discuss these issues, and I am happy to meet my hon. Friend.

Photo of Karen Buck Karen Buck Labour, Westminster North

Direct payments to landlords can help vulnerable tenants, but the issue remains that the design flaws in universal credit leave many tenants at risk. We now know that on average, new claimants of universal credit see a net fall of 40% of their income, one in eight tenants have built up arrears and there is a £440 million gap between what landlords believe they are owed and what tenants have paid. What immediate steps can the Minister take to deal with these structural problems, particularly the waiting period for universal credit, so that when the eviction ban is lifted next week, tenants are not at risk of losing their homes?

Photo of Will Quince Will Quince The Parliamentary Under-Secretary of State for Work and Pensions

First, I welcome the hon. Lady to her place. I am afraid that I have to start by disagreeing. It is wrong to attribute a rise in rent arrears solely to universal credit. We know that many tenants are arriving on universal credit with pre-existing rent arrears, which universal credit actually appears to be helping to clear over time. There is no wait for universal credit; people can get an advance immediately. We recognise that this has been a very difficult time for people on low incomes, and that is why we have injected more than £9.3 billion into our welfare system.