Landlords and politicians demand overhaul of flawed welfare reform policy
Landlords and politicians are demanding an overhaul of the UK’s welfare system, claiming that thousands of benefit claimants are facing rent arrears, debt and eviction as a direct result of policy design flaws within the Universal Credit model.
The Government’s ‘flagship welfare reform’ sees six benefit payouts combined into one monthly payment, replacing some of the benefits and tax credits, including:
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance
- Income Support
- Child Tax Credit
- Working Tax Credit
- Housing Benefit.
Warning that UC rules require claimants to wait at least 6 weeks for their first benefit payment, it means that many private renters are going without basic living essentials. This is giving them no choice but to turn to food banks and loan sharks, creating a ‘never-ending’ spiral of debt and despair.
According to the latest official statistics 430,000 people are currently on UC, which will grow to a staggering 7 million when the rollout is complete. This is why landlords, politicians and poverty campaigners are keen to move early to address some of the more negative effects.
The Government believe the scheme will help people move into work faster although this does not appear to be the case, considering;
- Treasury cuts to work allowances within UC are reducing the incentive for some claimants to get a job and will leave 1.2 million working families worse off,
- On top of the regulation 42-day wait for a first payment, some claimants are having to wait up to 12 weeks due to processing delays,
- The percentage of council tenants on Universal Credit in rent arrears has increased to a “critically high” 86% over the past year,
- Uncertainty about the system is contributing to a dramatic decline in the number of private landlords willing to take on benefit recipients, even if they are in work.
Although envisaged as a way of simplifying the benefits system by incorporating six benefits into one, its progress has been beset by IT failures and concerns over its operational complexity. So Ministers have slowed the pace of the rollout, which is now scheduled to be completed by 2022.
So as private landlords become more and more reluctant to let to UC recipients due to the high risk of tenant arrears, the popularity of an innovative lettings ‘Passport’ which enables councils to house more and save more is steadily increasing.
Devised by an experienced team of property investors and insurers, who wanted to find a pro-active way in giving landlords security against such issues, The Ark gives renters the opportunity of acquiring a passport to help secure decent accommodation, overcome the need to find prohibitive deposits and rent in advance as well as enabling tenants to build their credit rating and reference history.