Good afternoon
As “Full Service” delivery expands, and the numbers of claims increase, DWP’s administration is already failing, with even the simplest of tasks. Landlord clients are increasingly raising complaints of DWP agreeing Managed Payment to Landlord (MPTL), commonly called APAs, only to later renege on the promise, when the tenant transfers to “Full Service”. Not surprisingly, in some cases, the tenant receives, what is their “housing costs” element, sometimes accounting for 2/3 months, only to squander the substantial sum on everything but the rent.
I referred to this malpractice in one of my earlier bulletins where payment was inexplicably redirected to the tenant’s friend, who promptly misused it. On that occasion DWP agreed to make a further payment to the landlord and treat the payment to the tenant as an overpayment. Despite its promise the Housing Association has still to receive payment. I’ve been chasing that case, and many others besides, with DWP hierarchy and just this morning was advised DWP’s response is imminent.
Pending this decision, I should explain, the gist of my argument, that a further payment can and should be made to the landlord is based on Upper-tier decisions, like R (H) 1 & 2/08 that have been applied to Housing Benefit over many years. In my view, the same principles equally apply to Universal Credit. Meantime, DWP continues making these same schoolboy errors, on a scandalous scale, costing landlords a fortune in lost rental and putting their businesses at risk.
Regulation 45 of the Universal Credit (Claims & Payments) Regulations 2013 referred to below states:
Subject to the other provisions of this Part, benefit is to be paid in accordance with an award as soon as is reasonably practicable after the award has been made.”
Universal Credit, like HB, requires a claim to be made. The default position is to pay the tenant, but where a tenant fails to meet his/her obligation of paying his rent, using the UC award, the landlord can seek redirection, through the APA scheme, under the 2 months or 1 month’s rent arrears rule.
To change the “Payee”, DWP must supersede the original decision to pay the tenant and notify the parties accordingly. Once made, that decision remains in place until another revision or supersession decision replaces it. To do so, the Decision Maker must establish grounds (e.g. change in circumstances) and record his/her decision to this effect and again notify the parties.
So, once a MPTL has been agreed and notified, future payments must be paid to the Landlord. Where that does not occur, the landlord has the right to a further payment. Whereas, the payments made to the tenant constitute an overpayment, caused by DWP error, but nevertheless could be considered recoverable on the grounds the tenant “could reasonably have known he/she wasn’t entitled”. 
I’ve referred DWP to Upper-tier caselaw. Judge Turnbull is one of the eminent Judges that has been cited. At paragraph 15 of his decision CH/765/2008 he remarks: ”In its submission, in reply to this appeal, the Council states that “there cannot, therefore, be a second payment of Housing Benefit for a period that entitlement has already been correctly determined and paid.” However, the point is that benefit was not correctly paid in accordance with the decision of 9 May 2007. The Council’s submissions in this appeal in my judgment ignore the fact that the identity of the person to whom benefit was to be paid was an integral part of the decision (as indeed Mr Commissioner Jacobs made clear in paras. 36 and 37 of R(H) 2/08).
I have also referred to a recent Local Government Ombudsman decision in one of my recent UC updates for our website members—compensatory-awards
If your organisation has suffered similar rental loss, you should pursue with DWP. If you feel I can assist, in that respect, please get in touch or 07733 080 389.
Bill Irvine
UC Advice & Advocacy Ltd