Good morning

In recent months, I’ve been contacted by a few PRS landlords. Each was encountering difficulties with DWP, in relation to existing Direct Payments, following either a change of bank or account details, with their current bank (e.g., move to limited company). As required, each notified DWP, anticipating its staff would simply edit the bank details on their UC payment system.

In the first case, the landlord had around 40 “UC direct payments” or “APAs” in place and was anxious to avoid a situation, where the bank changes might cause a cancellation of the current arrangements or worse still, redirection to tenants who had already misused earlier HCE payments.

DWP generally encourages landlords to approach their Partnership or Practice Managers, so I suggested, he email either PM, attaching a spreadsheet, including the details of all affected tenants and the new bank details. However, DWP responded by rejecting our proposal, and instead, insisted on him re-submitting new online “direct payment” requests. The letter of rejection explained – “I appreciate you may be disappointed with my response, but it is the responsibility of the landlord, not Universal Credit, to update any change of details.”    

I responded on my client’s behalf, referring DWP to the relevant legislation – “Regulation 38, UC (Claims & Payments) Regulations 2013 requires landlords to notify DWP, of any information that might have an impact on the payment of UC.  It lays out the responsibilities of landlords in the following terms:

“Evidence and information in connection with an award”

38 – (4) A person to whom this regulation applies must notify the Secretary of State of any change of circumstances which the person might reasonably be expected to know might affect—

(a) the continuance of entitlement to benefit.

(b) the amount of benefit awarded; or

(c) the payment of benefit,

as soon as reasonably practicable after the change occurs.

The pertinent section, in this case is, Regulation 38 (4) (c), as new bank details affect the “payment” of the award. The landlord’s obligation is to simply notify the change, via a call, email, letter, or some other means, as the regulation specifies only “notification”. Your suggestion, it’s the responsibility of the landlord to “update” your payment system, on an individual basis, is wholly unreasonable. A change in bank details should have no material impact on the landlord’s continuing entitlement to the APA.”

DWP quickly conceded it was wrong, agreed to act as we had originally suggested, by appointing one of its staff to make the change at their end. Its Area Director, North East, who had been cooperative throughout, also subsequently wrote to me, after the exercise was concluded, stating:

“I would like to take the opportunity to thank both you and Mr A for raising this issue and drawing it to my attention. It has highlighted a flaw in our process and IT platform, that we weren’t previously aware of. As a direct result, we are now in the process of making improvements to the process and online application platform to ensure this is no longer an issue for landlords in the future.”

So, when later approached by another landlord, who had changed banks, with hundreds of “direct payments” operating, and at risk, I was confident we could achieve the desired result. However, a different DWP’s Area Director (South England) in this instance, despite being aware of what had happened in his colleague’s district, refused to adopt the same approach, insisting instead, my client had to re-apply in every single case. As my client was being pressurised by the previous bank to close their existing facility, he was forced to re-apply for each individual case, even though the only thing that had changed was the bank details. The exercise took fully two weeks to complete, with two staff working part-time, dedicated to the task. Despite their efforts, some payments have since bounced due to DWP using the old bank details.

In contrast, for those tenants paid housing benefit, via the same landlord, the Councils simply edited the client’s bank details on their system, allowing payments to continue without incident.

Support for the landlords’ position can be found by examining the other two terms of Regulation 38.

For example, if a tenant of my clients had vacated his property, and an APA was in place, regulation 38 (4) (a) would require my client to report the departure of the tenant. It would then be up to DWP to revise or supersede and update its system accordingly.

If another of my client’s tenants was being overpaid a HCE, the landlord, in terms of Regulation 38 (4) (b) would be under obligation to report the fact. Failure to do so could result in them becoming culpable for the resulting overpayment. DWP’s obligation would be to make the necessary alteration to the award via its system. 

A change of bank details” doesn’t, in any way, affect a landlord’s eligibility to any ongoing APAs as the circumstances that led to the APA being awarded haven’t changed. Changing bank details should be viewed as no more than an administrative task to be undertaken by DWP staff. Certainly, that’s how the Area Director, North east, viewed the situation, confirming, as he did, there was a gap in their process, which had been successfully closed, due to my earlier complaint.

If you’re ever faced with the same issue and experience similar DWP’s intransigence, I would encourage you to raise an urgent complaint, using some of the content of this bulletin, with your MP, and request him/her to refer the matter to either one of the Work & Pensions Ministers. Doing so, should ensure you avoid the potential risk of rental loss.

Bill Irvine

UC Advice & Advocacy Ltd