Universal Credit Explained in full.

Universal Credit Explained in full.

Universal Credit will go live in the Greater Manchester and Cheshire region six months before the national roll-out. The Pathfinder will take place in Tameside, Oldham, Wigan and Warrington from April 2013 before Universal Credit is rolled out across the country in October 2013.

[UPDATE] Universal Credit pilots scaled back

Up to 1,500 new claimants are expected to begin receiving Universal Credit each month throughout the Pathfinder period, and this will amount to a total of about 9,000 households. It will only apply to certain postcodes in the named areas, and those postcodes and the local authority and DWP offices that will be involved will be announced soon. Guidance has not yet been issued to the local authorities who will be involved.

The way in which Universal Credit will be introduced from October 2013 has also been confirmed. It will begin in seven locations across Great Britain in October 2013, and will then expand to all areas over the following months as Jobseeker’s Allowance is closed to new claims. More details will be made available in the next few months about the scheduling of this expansion, and how existing benefit and credit claimants will move onto Universal Credit with the majority making claims online rather than by telephone or face to face. The Department for Work and Pensions recognises that there will continue to be a minority of people who cannot use online channels. These people will be offered alternative access routes, predominantly by phone but also face to face for those who really need it.

The time line for introduction of Universal Credit.

[UPDATE] Welfare Reform | Benefit Changes Timetable

April Universal Credit Pathfinder in 4 areas Tameside, Oldham, Wigan and Warrington.

Universal Credit will replace income-related JSA, income-related ESA, Income Support (including SMI), Working Tax Credits, Child Tax Credits, Housing Benefit (LHA) and Council Tax Benefit

2013 October
Universal Credit will go live nationally starting with a further 7 areas (not yet named).

All new claims for out-of-work support will be treated as claims to Universal Credit. No new Jobseeker’s Allowance, Employment and Support Allowance, Income Support or Housing Benefit claims will be accepted. Customers transitioning from out-of-work benefits into work will move onto Universal Credit if they are eligible.

2014 April
Migration of people already on benefits whose circumstances do not change.

No New claims will be paid as Tax Credits.

During this time existing cases will be worked through

Universal Credit national roll out will be complete.

12 to 13 million tax credit and benefit claims will have been transformed into 8 million households receiving Universal Credit

The Aims of Universal Credit

  • Universal Credit will help to lift as many as 350,000 children and 550,000 adults out of poverty.
  • 2.8 million Households will have higher entitlements as a result of UC.
  • Over 1.3 million households will have an increase in entitlements of more than £25 a week.
  • Transitional protection to UC recipients will ensure that people will not receive less as a result of their move to UC, where circumstances have remained the same.
  • £2 billion funding has been allocated over the Spending Review period for the implementation of UC.

How the system will change for claimants

  • Claims will be made on the basis of households rather than individuals and both members of a couple will be required to claim UC.
  • Claims for UC will normally be made through the internet and most subsequent contact between recipients and the delivery agency will also be conducted online.
  • People will be able to obtain all elements of UC through a single application

Still under consideration:

The period of the assessment and the frequency of payments could be monthly in arrears.


How the system will work for claimants:

  • Universal Credit (UC) will work by creating one household allowance (called a personal allowance) which combines the help currently given in earnings replacement benefits – such as jobseekers’ allowance – with the help towards rent and council tax given through housing benefit (HB), council tax benefit (CTB) and child tax credit (CTC). This personal allowance is paid in full if the household has no other income and any savings are less than £6,000.
  • There will be a maximum amount of £26,000 (UC) a year payable to each household and £18,200 (UC) a year for a single person without children.
  • Some households will be entitled to an earnings disregard, which will mean that the first part of their earnings will not reduce the personal allowance. After any disregard, the personal allowance will be withdrawn at 65%, or £6.50 for every £10 of earned income.
  • Because UC is withdrawn at a much slower rate than the existing means-tested benefits, it will be paid to households higher up the income scale, and will also replace the help currently given by working tax credit (WTC) to those in work
  • Claim, assessment and award calculations will usually be made automatically so will be quicker and more efficient to process, allowing staff to focus on dealing with complex cases or those where there is a risk of fraud or error.
  • Recipients will have an online account through which they will be able to access information about their claim and UC payments, much like the options that online banking services currently offer. The financial rewards from work will also be made clearer, with recipients able to view online the positive effect of increased earnings on their household income.
  • Recipients will report significant changes of circumstance online. For changes of circumstance such as moving into work, losing a job, having a child or becoming sick, in most cases there will be an automatic re-assessment, providing a faster and more reliable experience than at present.
  • Existing information from relevant sources will be used as much as possible to avoid people having to repeat themselves when making a claim or reporting a change in circumstance providing information. During the transition period, however, recipients may be asked to provide greater levels of information to ensure that all data in the new system is correct from the outset.
  • If members of a household claiming UC find their total earnings increase to the point that they no longer receive any benefit, it is likely that they will not be removed from the UC system. Instead, the award will remain open for a fixed period, perhaps three months, so that it can be reactivated and payment made without the need for a new claim if the household becomes eligible for UC within that time.
  • Claims will be made on the basis of households rather than individuals and both members of a couple will be required to claim UC.
  • Claims for UC will normally be made through the internet and most subsequent contact between recipients and the delivery agency will also be conducted online.
  • People will be able to obtain all elements of UC through a single application.
  • The assessment of UC will have two stages.

1.A gross entitlement will be calculated by the Department for Work and Pensions based on information already held or provided by the recipient including information about any income they have, other than earnings. For recipients who are not working and who satisfy all the conditions of entitlement, this is the amount they will be paid.

Recipients who have earnings from employment will have those earnings automatically taken into account. It is proposed that HM Revenue & Customs will have a real-time information system to identify earnings and to calculate the net UC payment due by applying the appropriate taper to the gross payment. This means that those recipients who receive earnings through Pay As You Earn will not need to give this inform for payment purposes if the amount of their earnings change. Recipients will, though, still need to report other changes to their circumstances which affect their entitlement to benefit, or the conditions they must meet.

2. Those who are outside the Pay As You Earn system, such as the self employed, will have a system to ensure that UC payments take into account all household earnings.

19 million individual claims and an estimated eight million households will be part of the system.

Some existing recipients will move to UC by a process of natural transition, where in the current system they would otherwise have moved between existing out-of-work benefits and Tax Credits. Other existing awards will form part of a managed transition.

When an existing award to a current benefit ends and the recipient is to be instead awarded UC, that award will be a household award. In couple households, therefore, the other member will cease to be entitled to existing benefits and will become part of the household award for UC.

Some of the implications for Landlords:

  • LHA will be the first benefit to be reduced/removed if the total amount of a claim exceeds the cap of £26,000/£18,200.
  • Direct payment of rent will not be possible.
  • If a landlord wants to track a claim he will need access to the claimants online account.
  • Tenants with poor financial management skills may fail to prioritise rent before spending on other things.
  • It has not yet been decided but it is likely that UC will be paid monthly in arrears. Most AST’s call for rent monthly in advance and a new tenant would need independent means to enable him to pay the first months rent.  Existing tenants may be given some transitional help but if they are not there could be 6/8 weeks between the last LHA payment and the first UC payment.

In my opinion it is going to be vital that a landlord ensures that his tenant has access to a bank account or a Credit Union Account and that an electronic payment is put in place to pay the rent from the UC when it is paid into the claimants account.  There are many benefits of using  a Credit Union account the main one being that the landlord will receive notice (usually 28 days) if the payment is cancelled or changed by the tenant, he will also be notified if insufficient funds are paid into the account (from UC) to cover the rent due.

Thank you to Mary Latham for writing this informative article.

 Paul Routledge, Property Developer and founder of LandlordReferencing.co.uk, comments:
“When you’re old you remember things, and I remember the days of Supplementary Benefit. Many years ago I had to make an application for Supplementary Benefit and in my SB cheque I received a one off payment, outside of my giro. I cannot remember, as a kid, whether I paid it across to my landlord but what I do know is that the reason it was changed was because the system failed; simply becoming a salary for the young, uncaring, footloose and fancy free to do with it as they wish.

UC is the same as a Supplementary Benefit. So I ask the question: did we not learn from the last time?
It seems that this Coalition government does not like continuously doing U-turns but then what else would we expect, if we’re not going to learn from mistakes of the past? Therefore I believe that UC will create more homelessness and larger problems for the future, inside of our communities.

Mark Alexander, Landlord since 1989 & founder of Property118.com, comments:
“I’ve heard that recorded levels of homelessness have increased by 38% since the Coalition government took over and begun to implement austerity measures. Sadly, I feel that Universal Credit could make the problem worse as more landlords decide not to rent their properties to benefits claimants. The full extent of the rules still isn’t clear yet but if there is any possible good news for landlords it’s probably going to come via the Credit Union structure.”

Ben Reeve-Lewis, Council TRO, Landlord and tenant negotiator, comments:
“Perhaps the most damaging part of Universal Credit when it comes in will be that housing benefit payments will also be lumped in. As is the case with LHA, payments will not go to the landlords. Whereas PRS landlords protected their position by simply moving away from LHA tenants social landlords have no such luxury. One housing officer of 25 years experience who I was training last year, said to me ‘When that comes in, we’re finished.”

Polar Property, Letting Agent & LRS Sponsor, comments:
“We received housing benefit payments on behalf of the Tenants from five Local Authorities, one of which is Tameside Council. We are aware Tameside Council is one of the Councils who are piloting the Universal Credit. To date we have not received any information from any of the Councils informing us how the Universal Credit will work.

We are aware all of the Tenants benefits will be paid within the Universal Credit and the Tenant will be responsible for paying their rent.

We are concerned on a number of accounts.

The lack of knowledge from staff that will administrate the Universal Credit;
We find that around 10% of housing benefit payments have ‘over’ or ‘under payments’ due to the administration error or lack of knowledge of the staff at the Housing Benefit department.
We anticipate these errors to increase leading to suspension of payments whilst the claims are investigated.

Authority to speak to Letting Agents and Landlords;
We currently request all our Tenants who are in receipt of housing benefit to sign a letter of authority giving Housing Benefit staff permission to speak with our staff on all aspects of their claim. The letter of authority will now have to include all aspects of the Universal Credit.

Tenants not paying their rent;
We have a number of Tenants that are not be able to manage their money therefore we receive their rent direct.
We have Tenants who have a history of not paying their rent, are recognised as a risk by the Housing Benefit Department and we receive direct payment because of this.

With Tenants who are paid direct, whenever one misses a rent payment we contact them to request payment. If payment is not forthcoming we contact the housing benefit office to request they suspend their housing benefit whilst they investigate why the Tenant is not paying their rent.
When the Tenant’s rent is in arrears we request direct payment.
How will the Universal Credit deal with these issues?”

Rentplan.co.uk, Rent protection provider & LRS sponsor, comments:
“The Universal Credit is aimed at offering people benefits that cover their needs not their wants, in other words, if you have a two bedroomed flat and are living alone or with a partner, you need only a one bedroomed flat, and state benefits will cover that for an average property, only. The change is sensible for the country facing immensely difficult economic times, however it does not help the individual who is happy in their too large home.

Paying Universal Credit to the tenant direct may not be avoided however it will make landlords more discerning and they are likley to consider the tenants ability to pay rent before issuing a lease.

Landlords will want to minimise the possibility of not getting paid, I know as a professional broker with a long career in advising individuals how to protect themselves that even responsible people will ignore the fact that life has a way of throwing little surprises at you like sickness and unemployment.

It’s common now for some employers not to pay sick pay and that means statutory sick pay currently £81 per week is all some people will receive and this could lead people to use their housing allowance to cover food and other essentials.

The benefit system over the years has been fairly generous however that is not going to be the case in the future and we need to raise awareness of the problems people will face if they dont have some form of insurance whether it be savings to fall back on or insurance in the form of income protection. At the end of the day you cannot survive without income and the government are not going to provide it anymore.

Tenants need rentplan income protection so they can claim enough to cover the rent for at least a year so they dont face eviction when times are bad, its as simple as that and the cost…… on average is less than £30 per month. It can be increased to 50% of a persons income and is paid tax free.

Landlords can provide rentplan information to tenants in their welcome packs and encourage tenants to go online and arrange cover in minutes.

The alternative is LGI which is an expense for the landlord and with stringent conditions it’s not easy for landords to claim, whereas Rentplan costs the landlord nothing.

Rentplan, rest easy and avoid evictions !”

Pick My Pad, Estate Agent & LRS Sponsor, comments:
“Universal Credit will mean more arrears for landlords, meaning less and less landlords will rent to DSS tenants. A lose lose scenario.”

Manchester Lettings Ltd, Independent Letting Agent & LRS Sponsor, comments:
“UC is good in principle, the benefits system is long overdue an overhaul – but I think UC is tinkering around the edges. Doomed to fail? Yes.

Social Media & PR Assistant for Agency Express, the UK’s largest ‘For Sale’ board management contractors, comments:
“I think the concept of Universal Credit is a great one.  Centralising the welfare system will not only benefit those applying by being a simplified version of today’s rather complex system but it will also unify the benefits anyone receives into one arena, which will almost certainly eliminate a percentage of the fraud element.  Good thinking Iain Duncan Smith!!!”

Redbox Residential, Thackley Based Sales – Lettings – Management, comments:
“We feel one key change would be to pay LHA direct to LL’s, to help cut down on fraudulent claims.”

House Price Negotiators, working for the house buyer to get the best price, comments:
“Universal Cuts & the benefits overhaul have got to be good; simplifying a complicated system, whereby £5.2 billion a year has been paid out wrongly. Direct payment to the tenant will be a hassle for us landlords but the good ones will continue paying & the bad ones may spend it. Due diligence is going to be very important now.

Michael Stephen Day, Triple ESTA winning Surveyor & Estate Agent, comments:
“UC is laudable in concept but I have some fears for its successful implementation. Timing may however be right for such radical reform.”

Proquals, UK leading provider of training to property professionals, comments:
“This will increase the amount claimants are entitled to. How then will this act as an incentive for claimants to seek employment!?”

Letengine.com, Website that aims to improve lettings for decent Landlords & honest Tenants, comments:
“The idea of simplifying the benefit system is a great one in principle.  But lumping Housing Benefit reform in with other benefits shows a complete lack of understanding of how people actually live their lives.  Housing benefit is different.  It protects one of the most important of human needs: the need for shelter.  But more importantly there are often two ‘customers’ of the benefit, the tenant in whose name it is paid & the landlord who eventually receives it.  For it to do its job effectively, both must be happy.  However if the reforms press ahead in their current form, neither will be.

The capping of benefits is a crazy move.  Demand for housing in key areas far outstrips supply, and landlords have the freedom to choose between accepting benefit and non-benefit tenants.  Capping the amount of benefit that can be paid creates nothing short of a huge disincentive to rent your property to tenants on housing benefit.  Even if a landlord wanted to focus on benefit tenants out of principle, the sums under the new proposals simply don’t add up.

As if this weren’t bad enough, there’s the issue of direct payment of rent.  Direct payment offers a powerful incentive for landlords to rent to benefit tenants; it makes them seem like a safer prospect.  Again, landlords these days have plenty of choice over who they rent to.  If the government really wants them to continue to rent to benefit tenants they need to make it as easy & risk-free as possible.  Preventing direct payment has the opposite effect.  Many housing benefit tenants find it hard to manage their personal finances: this is not because they are on benefits, it’s because they are human beings.  We all need a bit of help with this from time-to-time (remember the credit crunch?), let’s not remove that help from some of the most vulnerable members of society.”

Whilst collecting these quotes it is interesting to note that 40% of UK (Private Rented Sector) landlords and letting agents asked were completely unaware of the Universal Credit reforms; but we believe it to be as high as 60%.

We want to hear YOUR views on the matter!

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  1. I thought that I would update this discussion with this question asked in Parliament this week and the reply

    Derek Twigg MP asked for:
    “an urgent debate or statement from a Minister to explain why the Minister with responsibility for welfare reform, Lord Freud, has agreed that in Northern Ireland payment of housing benefit directly to landlords will continue, while in the rest of the country payment must be made directly to tenants—despite all the problems, highlighted by many people, with that—and to explain the unique circumstances for this decision?”

    The Leader of the House, Andrew Lansley MP replied that he will:
    “talk to my hon. Friends at the Department for Work and Pensions, so that they reply specifically to the hon. Gentleman, but my understanding is not that the changes to universal credit rule out the possibility of direct payment, but merely that it is important that they be assessed and examined to ensure they are appropriate. Wherever possible, we want those in receipt of universal credit to feel like they are in work. We do not want to change the sense of that, so that they get their pay and it is their responsibility to live within their means.”

    Follow me on Twitter@landlordtweets

  2. The best way is to have test run…. I have mix feelings about UC ex; if your tenant is addicted to drugs what then. The other problem is for foes who have large families they many need 3 bed house but to get same extra cash retting 2 bed house like I said test run is best.

    UC on BETA

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  4. I have 60 housing benefit tenants most of whom do not have a computer or any ability to use one, many have difficulty in reading. How will they make a claim? Few have any banking facilities and, most importantly, do not have any desire to have a bank account. Will I have to guide them through the whole process, as if there were not enough admin work to do already? With only two exceptions they all prefer to have payment made direct to the Landlord as they do not have the ability to manage their money, they know this and choose to have their housing costs paid this way. It is common for these tenants not to have enough money to feed their electricity meter for at least part of their payment cycle so inept are their money management skills.

    I regret that this is a scheme doomed to failure, a scheme which will fail the most vulnerable members of society. Already I no longer accept the under 35’s even if they are in work, for should they lose their job I will have the problem of evicting them. The single room allowance falls some 30 pounds short of the minimal rent I charge for a self contained flat. Local charities are desperate to find housing for the under 35’s, soon they will be desperate to find housing for many Universal Credit claimants. Local authorities will end up paying for bed and breakfast accommodation at greatly increased cost.

  5. Pingback: Universal Credit | The impact on women's refuges.

  6. Local authority and housing association partnerships are named today as the successful volunteers the Government plans to work with on pioneering demonstration projects that will see claimants in the social rented sector directly receiving monthly housing benefit payments and paying rent to landlords themselves for the first time.

    The demonstration projects, which will take place from June 2012 until June 2013, will test how claimants can manage housing benefit monthly payments ahead of the introduction of Universal Credit from October 2013.

    The projects will also look at the appropriate level of safeguards needed to help secure landlord income streams if tenants fall behind on their rent.

    The local authority and housing association partnerships named for the demonstration projects are:
    Southwark Council and Family Mosaic, London
    Oxford City Council and Oxford Citizens, (part of the) Greensquare Group, Southern England
    Shropshire Unitary County Council and Bromford Group, Sanctuary Housing and The Wrekin Housing Trust, West Midlands
    Wakefield Metropolitan Borough Council and Wakefield and District Housing, Northern England
    Torfaen Borough County Council and Bron Afon Community Housing and Charter Housing, Wales

    Each will be involved in testing out different elements of the project, including testing different trigger points when social landlords should receive direct payments if tenants fall into specified levels of arrears. The projects will also inform how best to communicate the changes to claimants, provide assistance with budgeting to successfully pay their rent, and support claimants and landlords experiencing financial difficulties.

    Minister for Welfare Reform Lord Freud said:

    “Direct monthly benefits payments are a key part of Universal Credit, allowing claimants to prepare for the financial responsibilities they will face when in work and to encourage them to move away from often costly weekly and fortnightly budgeting.

    “However, we know that some families will need support to adapt to managing their finances in this way. The demonstration projects will help us to understand the demand for budgeting support and the best ways to deliver it.”

    Alongside this measure, Ministers are working with the banking sector, credit unions, supermarket financial services and the Post Office to explore opportunities to develop cost-effective budgeting accounts for claimants moving onto direct payments.

    The Government has also commissioned a review of the projects led by Professor Paul Hickman from the Centre for Regional Economic and Social Research at Sheffield Hallam University. The review will evaluate the impact of direct payments on claimants and vulnerable groups, as well as local authorities and social rented sector landlords.

    While the majority of Universal Credit claimants renting in the social sector will be responsible for making their own rent payments to landlords, vulnerable claimants and pensioners will continue to have their housing costs paid direct to their landlord.

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  11. I really enjoyed my two days in Manchester and the Landlords Show where Paul and I spoke about Univeral Credit and how landlords should position themselves to protect their rent.

    One thing that really surprised us was that so many landlords had not even heard of Universal Credit and many of them let to people on benefits. It was very worthwile being there to warn them and to offer them soluntions. Paul is now going to have a section on this site for Credit Unions so that landlords can find those that are in their area and begin to use them with tenant who are on benefits before Universal Credit hits them. This site already gets over 1M hits a month I imagine that will increase massively when this is the “go to” place for information about Credit Unions

    Thank you Paul for you continued support of landlords helping to protect our rental income and enabling us to continue to offer good homes to good tenants.

  12. Pingback: Confirmed: Universal Credit ends direct payment of housing benefit to landlords.

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  14. I don’t remember saying you could speak Paul but since we are probably the only duo around that can boast 70 years combined experience as landlords I might let you share your pearls of wisdom – if you promise to be good and VERY PC!

  15. Paul Routledge and I will be talking about how landlords can avoid the pitfalls of Universal Credit at the Landlords Show in Manchester just after midday on 27th and 28th June. Come and talk to us we want to make sure that the PRS survive this.

    Follow me on Twitter @landlordtweets

    • I will look forward to meeting everyone that comes along and Mary said I can speak a bit “well tell you my name” :-). I will be covering lifestyle referencing and how it can help you not take a bad tenant and also be a deterrent to those who perhaps think it is a good idea to have you over.

      We are also doing the clinics, so for new landlords that want to tap into 70 years of property knowledge we will be there to help you.

  16. For those who think that this is “speculation” here is the source of my information. This is primary legislation and the purpose of this act is to abolish individual benefits previously paid and to combine them all into one “purse” of payments so that claimants begin to deal with their finances in just the same way as people who receive a regular “pay packet”.

    Electronic communications will be used to reduce the cost of administering benefits. Information will be taken from sources like HMRC to reduce the amount of information that a claimant is required to provide at the moment. Only in cases where people are unable to use electronic communications will there be an alternative.

    From the Welfare Reform Act 2012


    Universal credit

    (1)A benefit known as universal credit is payable in accordance with this Part.

    (2)Universal credit may, subject as follows, be awarded to—

    (a)an individual who is not a member of a couple (a “single person”), or

    (b)members of a couple jointly.

    (3)An award of universal credit is, subject as follows, calculated by reference to—

    (a)a standard allowance,

    (b)an amount for responsibility for children or young persons,

    (c)an amount for housing, and

    (d)amounts for other particular needs or circumstances.

    Housing costs

    (1)The calculation of an award of universal credit is to include an amount in respect of any liability of a claimant to make payments in respect of the accommodation they occupy as their home.

    Abolition of Benefits

    The Following benefits are abolished

    d) Housing benefit under Section 130 of Social Security Contributions and Benefits Act 1992


  17. Sounds like we are all bloody confused. I think I have to agree with Paul if it is true that they are only paying direct we are all doomed.

    I am going to be one of those pensioners that start growing herbal cannabis and selling it to my tenants for medical reasons, it is the only way I will get the rent and I will have lots of rich punters queuing.

    • lol.
      Even if it is as bad as it sounds (I don’t think it is) then you can set up bank accounts with Credit Unions or other services. The UC goes into these accounts for tenants and pay your rent (rest forwarded to tenant).

      Its a loop hole, that we have been using for a year or so now. We require an account before offering tenancy to LHA tenants.

  18. We are encouraging people to be prepared for UC. We exist to provide a solution to Universal Credit both for landlords with regards rent, and tenants for their other important ourgoings. They can ask us to pay any important household bill, then load the remaining benefit onto a prepaid card for them to use as they wish.
    As we are not a credit union we can deal with people from any area.
    The only solution to the problems above is to have that support there for your tenants from day one!

    • Hi Leanne,

      You should become a sponsor and interact with the members to tell them about your service. Its very reasonable and your support helps keep the service free for our members.

    • Your prices are very reasonable by the way for what you offer.

      • Thank you we are getting more sponsors so we can spend a bit more to get more members and bring more awareness so we all do well and with results like this Rent Default = £5,500 & Property Damages = £5,000today where an agent stopped a real bad one getting into their landlords property. It’s a win win for everyone.

  19. My problem still lies with the fact that a very large proportion of people cannot manage their finances and a vast majority of benefit claimants are in some way dependant on drugs and/or alcohol.

    This issue is not rocket science and as I have witnessed cash payments too bad people first hand, I have the credentials to comment with experience on my side. I found my tenant dead after having his head smashed in by another tenant with a hammer. The murderer received his £800+ LHA (Including back payment) cheque and spent it on crack cocaine in just over a week with no money coming to me and then needed more, so he went to his neighbours flat to try and rob him and when his neighbour refused to give him £20 he killed him with a claw hammer.(Man denies brutal hammer murder)

    I cannot believe this Government can say in one voice that “We have a broken society” and then give out cash earned by the hard working tax payers to dysfunctional people and so blindly that they can only be funding a bigger break down.

    This Government and the do-gooders can spin it anyway you want about human rights, but the simple fact of life is a drug addict or alcoholic will not give the rent to the landlord before he has his fix.

    So which one of these drug dependant people in this report do you think paid the landlord before having the fix?

    Statistics for drug treatment activity in England 2010-11
    National Drug Treatment Monitoring System

    • My problem still lies with the fact that a very large proportion of people cannot manage their finances
      Recent FOI request I made showed in Bradford over 20% of LHA Tenants are more than 8 weeks in arrears.

  20. I think most of this article is speculative at this time.

    – Direct payment of rent will not be possible.
    – If a landlord wants to track a claim he will need access to the claimants online account.


    • Sources:

      Page 20 – Point 31. (of the Universal Credit full document states:
      “There are advantages in paying the housing component to individuals, rather than the current system of payments direct to landlords …”

      Page 33 – Point 5. (of the Universal Credit full document states:
      “Claims for Universal Credit will normally be made through the internet and we expect that most subsequent contact between recipients and the delivery agency will also be conducted online …”

      At Landlord Referencing we believe that speculation is needed in these times of constant government u-turns; to avoid more.

      • Thanks, but this document is dated 2010, very old and refers only to social landlords not PRS.

        point 31 on pg 20 clearly states that provisions will be looked at for Direct Payments to LL. Its not as black and white as “direct payment of rent will not be possible” .. It does not say this.

        Point 5 on pg 33 – again it says “most subsequent contact” and is referring to couples not Landlords. This is highly speculative that “If a landlord wants to track a claim he will need access to the claimants on-line account”.. It does not say this.

        Whilst I respect Mary Latham efforts that has gone into writing this detailed and informative article. It is highly speculative.

        • The Universal Credit full document 2010 is the most recent document to be published regarding Universal Credit.

          Valid point that it doesn’t mention the PRS; but this is what we’re trying to address and highlight.

          • Ive asked DWP for a response on LHA question, im doubtful one will be forthcoming but was worth a shot. My own council says it wont effect LHA at all, but what do they know, lol.

            Will be writing to my MP shortly on this and other matters. He likely to reffer it to the Housing Minister.

  21. All views are my own and not necessarily that of my company 😉

    Universal Credit is a very emotive subject and one that quite rightly needs to be explored and aired..

    The current method of applying for and receiving financial help from the Government is antiquated. It makes those already suffering from the complexities of life and the fallout of the current economic crisis even less able and willing to trawl through the enormous amounts of paperwork. Often people lack the ability either through circumstance, anxiety, stress or even shame to maneuver around the various obstacles such as “means testing” needed just for them to make ends meet. Equally for those that “appear” to be better off on benefits rather than working; shouldn’t the balance be redressed or should we just sit back and accept that this is “the way it is”?

    The first question I would therefore ask; is Universal Credit and / or an overhaul of the current system needed? The simple answer (in my very humble opinion) has to be…..yes.

    Let me make it abundantly clear that I do not in any way seek to state that I totally understand the current or indeed the new benefits system however the plan to reduce the risks the new scheme brings by phasing it in over four years from October 2013 with each stage bringing in a different group of claimants seems to me a sensible precaution.

    However therein also lies a very big and worrying issue; with over 30 million people (1); receiving benefits of one form or another, the logistics of running so many different schemes at the same time as introducing Universal Credit is enough to give most people (including me) a headache but think for a minute if it all goes wrong.

    What about the person or family waiting for their payments to come through each week / month only to find they are delayed as the new system is either unable to cope or is so complex that the additional manpower needed to administer it is just not there as the government has again cut DWP’s funding. How will they cope and who will be held responsible and even if someone is hung out to dry or falls on their sword what real difference will that make to the family or person without the necessary funds to keep them going? It may seem dramatic but I have seen first hand how a family unable to work but desperately wanting to struggled with the the current system only for it to fail them miserably; Bank of Mum and Dad no longer exists but good job gran was there to feed the children…

    One of the wider issues that affects members of this forum is in regards to let properties; Landlords and or agents will have to wait for the rents’ to be paid and good tenants may be held to ransom by the very system that is “meant” to make life less complicated. Either way its fraught with difficulties and it certainly appears from the many contributions by the likes of Property 118 and Polar Property that information or rather the lack of it is of serious concern.

    I have seen (close up) the challenges faced by the Prison Service when new ICT has been introduced and then failed (miserably) at a huge cost to the taxpayer so already know that the introduction of such a new system is not going to plain sailing. Worryingly though I have yet to see any real evidence of contingency planning that will help mitigate the risks and help manage the inevitable “blip” in the system when the proverbial balls will all be up in the air and that does leave me with a deep sense of foreboding.

    Campaign4Change (2) has apparently asked several times for an “open and transparent” dialogue ( I am smirking in case you are wondering) with the Government as well as a report on DWP progress but their requests seem to be falling on deaf ears.

    Why won’t they share?

    Its only right that with any new scheme, especially as grand and complex as this one, that the Government will want to ensure that everything is working and that it has been well thought out, appropriately modeled and risks mitigated / managed before being released for the inevitable “public flogging” however without information the public will make up its own uninformed mind and that generally does not bode well for anyone……

    The public are already disenchanted with the Government over its handling of the economy, cuts to services, impact on pensions and pay and some would even go as far as a deterioration in basic human rights….but that is probably for another conversation…

    So, going full circle…should the Universal Credit scheme be allowed to trundle into town and tout its wares? I would again say yes but would also say to the Government that this is an opportune time to live up to their “transparency” ideal. Unless they change their current stance and provide the clarity that everyone including Landlords, Agents, tenants and the general public is now seeking, whether its a good scheme or not; it will fail and more importantly will fail the people its intended for.

    (1) Institute of Fiscal Studies Briefing Note 13 – Nov 2010
    (2) http://ukcampaign4change.com/universal-credit-wholl-be-responsible-if-it-goes-wrong/

  22. If you pay tenants direct there will be streams of homeless people on the streets,it is the single largest constituent of universal credit and will not be transferred ro landlords

  23. How many LHA tenants are also not aware of UC.
    If LL insist on payment via Credit Union then this needs to be advised now so tenants may make arrangements to satisfy the LL.
    The last thing that they need to happen is being evicted because they are not paying via a CU.
    The other issue is many UC claimants are unable to open even basic bank accounts as the banks refuse to open such, even though they are supposed to.
    How then are UC claimants to receive their UC?
    It would be a good idea for LL to advise tenants that payments willm be required by a CU and this could be setup now with LHA payments being made to the CU.
    There would then be a seemless transfer when UC comes in and this would be reassuring for both LL and tenant.