Ask 3: Universal Credit payments to the landlord need to be fit for purpose
SFHA, together with its sister UK housing federations in England, Wales and Northern Ireland, is calling for six changes to be made to Universal Credit in order to improve the whole system for tenants and housing associations. SFHA has invited six guest bloggers to write about one of the #SixAsks. Today, Jennifer Soley, Customer Services Manager at Albyn Housing Society in the Highlands, explains why we need a system that matches tenant and landlord payment schedules.
What’s the current situation?
Let’s start at the here and now, what is happening with payments made directly to landlords at the moment?
As a housing association, we get 13 payment batches per year from the Department of Work and Pensions, and these come to us on a four-weekly basis.
Albyn gets one sum paid directly to its bank account, then, five days later, the housing association receives a schedule with a list of which customers the payments relate to.
The schedule that we receive in relation to the payments is our only way of matching up which tenants have had their rent paid and which haven’t.
Our customers who receive Universal Credit get 12 payments per year, but we, and all other registered social landlords, will receive 13 payments per year. Meaning there will be one batch per customer where we do not receive a rent payment for them.
We cannot predict which batch payment that is, and it will be different for each customer. Therefore, when a customer does not appear on the schedule – we cannot distinguish if it’s because of what we have started calling the ‘13th ghost payment’, whether the tenant has been sanctioned, or had a change of circumstances.
The current system of paying managed payments to landlords is flawed. A change needs to happen in order to make the system fit for purpose.
The current system doesn’t allow us the clarity and, therefore foresight, to advise our customers of what payments are due – it’s confusing for the landlord and the customer.
Scottish choices are paid via managed payments to the landlord and therefore the unintended consequence of this payment system is that, by choosing a Scottish choice, our customers are choosing debt.
What changes would we like to see?
We would advise that changes to the system are made to align the tenant payment schedule and the landlord payment schedule – this will reduce the likelihood of tenants falling into further debt and being wrongly chased for payments.
Additionally, we would advise advance notification to landlords of which tenant payments will be paid during every payment run, and this should be done in monthly iterations rather than every four weeks.
And finally, landlords should be notified, in advance, if a customer is going to have their rent paid differently. There are many reasons that this may happen: there may be a sanction in place which affects a customer’s rent money, the tenant might have had a change of circumstances which affects their rent payments, or the tenant might have opted for a change in payment and therefore the Department for Work and Pensions will move forward by processing payments directly to the tenants rather than the landlord.
1. End to the five-week wait for payment. Claimants should be able to get a payment in the middle of this period and there should be greater flexibility on payment frequency for all
2. More data sharing between DWP and social landlords and the restoration of implicit consent (when a claimant allows a person or organisation to help with their Universal Credit claim) will mean landlords can better support tenants and prevent problems. This is key to the success of managed migration.
3. Where benefit is paid direct to the landlord, we need a system that is fit for purpose, with the landlord receiving the payment on the same cycle as the tenant
4. Increased funding for support and advice to make sure people do not miss out on entitlement, including allowing backdating for more claims
5. Making sure that work pays for everyone by matching monthly assessments to earnings within that period, improving work allowances and reducing the taper
6. Restore inflation linked uprating to working age benefits from April 2020