RLA urges a right to direct UC rent payments

Citizen’s Advice report reveals 49% of those it helps with Universal Credit are in arrears over housing payments.

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The RLA has backed Citizen’s Advice over a need for more changes to Universal Credit – urging the “immediate” introduction of a right to direct landlord payments.

Responding to a report published by Citizens Advice, showing 49% of those it helps with Universal Credit are in arrears on their housing payments, Chris Town, RLA vice chair, said: “One of the main drivers of rent arrears has been that tenants cannot routinely choose to have the housing element of Universal Credit paid directly to their landlord at the start of a claim.

“Many tenants prefer to have the assurance that their rent is paid and their right to do this should be introduced immediately.”

Town added that direct payment needed to be coupled with lifting the freeze on housing benefits and the housing element of Universal Credit.

“Housing cost support is simply not keeping up with the realities of rents in the private sector, despite them falling in real terms over the past year,” he said.

As reported by 24housing, an online portal passing benefit related rent payments direct to PRS landlords won’t be live until Summer at the earliest.

The RLA’s most recent research shows that, of those landlords with tenants on Universal Credit, 61% experienced them going into rent arrears in the past 12 months – up from 38% last year and 27% in 2016.

A report for the RLA by experts at Manchester Metropolitan University noted that caps on the Local Housing Allowance Rate have been a key driver of homelessness from the private rented sector.

The Office for National Statistics shows that in the UK, average rents in the private sector increased by 1% in the year December 2018, much lower than inflation.

The Citizen’s Advice report shows that, despite the wait for first payment being reduced to five weeks, one in two of those helped by the charity were in rent arrears or fell behind on their mortgage payments – the same number as when the wait for the first payment was six weeks.

Citizens Advice also found 60% of people it helped are taking out advances while they wait for payment.

The research revealed that – following changes by government in 2017 – fewer people are falling behind on their bills or going without essentials during the wait period.

Payment timeliness has improved – now one in six people are not paid in full and on time, while previously it was one in four.

The report, Managing Money on Universal Credit, released today, is the result of new analysis based on the 190,000 people Citizens Advice has helped with Universal Credit.

Among the people the charity helps with debt and Universal Credit:

  • Debt problems are more common for the people we help with Universal Credit than those claiming benefits under the previous system, with 24% of the people we helped with Universal Credit also seeking debt advice
  • Nearly one in two (47%) have no money left after essential living costs (such as food, housing and transport) to pay creditors, or are spending more than they take in
  • More than four in five (82%) hold priority debt such as council tax, rent arrears or mortgage payments, and energy debts

Citizens Advice is calling on the government to make Universal Credit far more flexible to fit around people’s lives and to make sure people have enough money to live on.

It also wants Alternative Payment Arrangements to be more widely available, allowing for rent to be paid direct to a landlord, more frequent payments, and a payment to go to both members of a couple.

Just 3% of claimants currently receive more frequent payments, while just 20 households in the UK receive split payments to different family members.

Four in 10 of the people helped by Citizens Advice are aware of managed payments to landlords, while just one in six know payments can be made more frequently.

Gillian Guy, Chief Executive of Citizens Advice, said: “Half the people we help with a Universal Credit claim are still struggling to keep a roof over their heads while they wait for their first payment.

“Changes to the waiting period for first payment have improved things for many people, but our evidence shows they don’t go far enough.

“Universal Credit must continue to be reformed so it works for all claimants and leaves people with enough money to live on.”

Citizens Advice surveyed 1,193 people the charity helps with Universal Credit, analysed data from 21,085 debt advice clients, and interviewed claimants and frontline advisers for this research.

Every area in the UK now has Universal Credit, and the number of people claiming the benefit doubled to more than 1.4 million in 2018 – this is set to increase by a further 1.6 million people this year.

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