Claimants may find themselves in rent arrears for a variety of reasons, many of which can pre-date their claim to Universal Credit. The Department encourages people out of work, or on a low income, to consider whether claiming Universal Credit could provide them with additional support before issues, such as debt, spiral out of control. We promote Universal Credit through various external channels, including through the ‘Understanding Universal Credit’ website, to help people navigate the range of support available and provide information about how to apply.
Our own analysis shows that Universal Credit in fact reduces debts, such as rent arrears. Supporting research carried out by the National Federation of Arm's-length Management Organisations (ALMOs), 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.
Recent changes to Universal Credit include temporarily increasing the standard allowance by up to £1,040 per year and increasing the Local Housing Allowance rates, including the Shared Accommodation element, so that it covers the lowest 30% of local market rents benefiting over one million households by £600 a year on average. These measures form part of an unprecedented increase to welfare spending of £9.3 billion following the outbreak of COVID-19.
The Department has also delivered a number of improvements to support claimants during their first assessment period, such as removing waiting days and paying those claimants moving from Housing Benefit on to Universal Credit a two week ‘transitional housing payment’. Since July 2020, an additional two-week run has been introduced to assist eligible claimants moving from Income Support, Employment and Support Allowance (IR) and Jobseeker’s Allowance (IB). Advance payments are available so nobody has to wait five weeks for payment.