Good morning

The Department for Work and Pensions (DWP) has released updated guidance regarding Alternative Payment Arrangements (APA), commonly known as Direct Payments. This revision follows a judicial review, initiated by Mr Roberts, a tenant of Guinness Housing Association, who challenged DWP’s failure to consult him before redirecting his housing costs element to his landlord to cover alleged rent arrears. Details of this case were previously shared in a members’ bulletin.

The principal outcome of the new guidance is that, before deciding on redirecting payments, DWP must inform the tenant about the landlord’s application and grant a seven-day window for the tenant to contest the application, providing any relevant evidence. Given that around 60% of applications concern rent arrears, tenants now have one week to dispute the landlord’s assertions regarding the existence or amount of arrears. If the tenant does not respond within the allotted period or fails to supply supporting evidence, direct payment should be made to the landlord.

For private landlords—including voluntary organisations, charities, individuals, or companies—already familiar with this process, the changes are unlikely to have much impact, as they predominantly affect registered social landlords (such as councils and housing associations).

Previously, SRS landlords could, almost always, secure redirection of the “housing costs” promptly by applying through the SRS portal. The most significant change for them is the potential delay between applying and receiving confirmation, especially if the tenant chooses to challenge the landlord’s claim. Associated with this, they will almost certainly experience an uptick in rent arrears and demand for recovery action. The authority to redirect payments remains discretionary, and both tenants and landlords retain the right to request a review of the decision if this initially proves disadvantageous.

Key Elements of the New Guidance

  • Application from the Outset: APAs may be considered from the beginning of an award by either the Work Coach or Account Manager, acknowledging the need for redirection during “claimant commitment” interviews with the claimant. This dialogue should occur at the start of any claim or at any point during the award if the tenant notifies DWP of accumulating rent arrears or the risk of repossession.
  • Claimant-Initiated Requests: Tenants with a history of financial mismanagement, or those worried that direct payments might lead to misuse of funds, can trigger an APA. DWP provides scenarios illustrating when this could be appropriate. Some of my PRS landlord clients use a standard letter, signed by the tenant, which is submitted to the Work Coach during interviews or uploaded via the journal.
  • Refusal Notification: If an APA request is declined, the landlord will be informed of the refusal, but will NOT receive any explanation, DWP suggests, to comply with GDPR requirements. I disagree and have consistently challenged this mistaken belief with DWP’s management. It makes no sense to me that a landlord can make an application, based on Tier 1 criteria, but be refused and given no explanation for the refusal. DWP in 2018 sought legal advice on this question and was advised there was no legal impediment to sharing information, especially with “Trusted Partners”, i.e. registered providers. So, there is no reason for any change previous practice.

I would recommend you circulating this note and guidance to appropriate frontline staff, as the new guidance has already been implemented.

I hope you find this information useful, and if you need clarification or further explanation, you’ll contact me bill@ucadvice.co.uk or phone 07733 080 389.

Regards

Bill Irvine

UC Advice & Advocacy Ltd

www.ucadvice.co.uk