To ask the Secretary of State for Work and Pensions, what discussions her Department has had with social landlords on rent arrears caused by the time between a claimant’s universal credit being paid and the housing costs being sent to the landlord via APA on the next bulk payment run.
Initial analytical work we have carried out with a single housing provider suggests that many tenants are arriving on Universal Credit with pre-existing rent arrears, supporting research carried out by the National Federation of ALMOs which shows over three quarters of their tenants come onto Universal Credit with pre-existing rent arrears. It also shows that arrears tend to increase prior to making a claim for Universal Credit, and that Universal Credit actually appears to be helping to clear arrears over time. We are currently extending this analysis to include a number of housing providers. It will be published when completed.
The Department encourages all Universal Credit claimants to actively consider how best to manage their personal budget which includes making their own rent payments to landlords, with additional advice and support available from work coaches and case managers where needed. We regularly engage with a range of stakeholders, including landlords, to ensure we understand concerns which helps us to design improvements to Universal Credit.
Alternative Payment Arrangements (APAs), such as a managed payment to landlord (MPTL), are available to enable the housing costs element to be paid directly to the landlord if the tenant is likely to have difficulty in managing their rent payments or is in rent arrears. APAs will only be considered where a lack of financial capability poses a risk to the claimant, or their family, and the decision to implement one is assessed on a case by case basis.
The Department issues a schedule of payments to Social Rented Sector (SRS) landlords, and our Third Party Creditor system - currently used to pay SRS landlords - uses a 28-day payment cycle. We are currently working with a range of landlords to design, develop and test a better services with the intention of having a solution in place by the end of this year.