19th February, 2017
The Scottish Government has just started an 8 week consultation period on the draft Universal Credit (Claims & Payments) (Scotland) Regulations 2017 which make provision for:
- Fortnightly payments of Universal Credit; and
- Claimant choice to have payments redirected to their landlord.
It’s vitally important all Scottish landlords respond to the consultation exercise as your comments may help to shape the way they operate for some years to come.
You can respond by clicking the undernoted link – https://consult.scotland.gov.uk/low-income-benefits/universal-credit-claims-and-payments/consultation/intro/
Before doing so, examine the draft regulations and Ministerial commentary here: http://www.gov.scot/Resource/0051/00512978.pdf
I have already made my own response which includes the following:
“What’s missing in the draft regulations is, the right of the landlords to independently request redirection themselves, especially where the tenant has some vulnerability, so may not avail themselves of this facility or may have a past record of delinquency i.e. receiving housing benefit or the “housing element” of Universal Credit themselves and not handing over the money to the landlord.
Much of the rent arrears, currently being experienced in UC can be attributed to the delay in payment, caused at the initial award stage and a Landlords’ Managed Payment scheme which ,as yet, is not fit for purpose. We’ve already seen evidence of this from some LHA/UC tenants (albeit still in the minority) aware of their right to the payments, resisting landlord requests for direct payments, preferring instead to receive the sum themselves. Oftentimes, they do this with the clear intention of misusing such payments, seemingly unconcerned their tenancy will be in jeopardy of being repossessed, due to rent arrears.
Doing so causes landlords, UK wide, considerable rental loss and additional cost of recovery action. This is something the SG will, no doubt, wish to avoid as it would undermine Pre-action Requirements and could also seriously impact on Scottish Courts administration if actions for recovery of the arrears & property were to significantly increase
We already have some experience of this situation. Between April 2008 and 2011 when the Government of the day decided to pay Local Housing Allowance direct to private tenants. Around 30% of tenants failed to hand over the first two payments, forcing the landlord to seek redirection, using the Housing Benefit 8 weeks’ rule. Rent arrears went through the roof.
As a result of private landlord lobbying, an LHA Inquiry was set up in 2011. I provided written and oral evidence on behalf of SAL, focusing attention on the problem of late & non-payment and highlighting the possibility of making the “first payment” of LHA, by cheque, to the tenant, but in the name of the landlord. The idea was embraced by the Inquiry, resulting in a DWP circular being sent to all local authority chief executives encouraging adherence to this approach. Regrettably, the same approach does not apply to Universal Credit.
The Inquiry also introduced a number of variations to the pre-existing “safeguarding provisions” which made it easier for landlords to achieve redirection. This, in turn, substantially reduced the problem and stemmed the flow of PRS landlords withdrawing from LHA. Again, DWP’s current “APA” arrangements are much more limited in this respect and provide no rights of appeal.
The draft regulations also provide the claimant with the ability to cancel redirection if they so choose. You may wish to create a caveat, that takes into account the fact that, a minority of tenants have past records of repeatedly not paying their rent on time, accruing substantial arrears, and resisting attempts at recovery. Some have been evicted, on more than one occasion. In situations like this, redirecting payment to the tenant may simply result in the public purse being misused, putting the tenant back into arrears, under the threat of recovery action and potential eviction.
Universal Credit once in payment is considered a continuous award which can only be amended or stopped by a process known as revision/supersession. This means, in effect, that to alter the quantum, method and rate of payment, the claimant has to demonstrate either the original decision to pay their landlord was wrong or there has been a change in their circumstances since then.
Upper-tier Tribunal Judges have laid down guidelines to be strictly followed by council HB/LHA Decision Makers. So, for example, in LHA cases, where a tenant seeks redirection from the landlord, the LA is expected to suspend payment; contact the landlord for his/her views on the tenant’s request for redirection; collate the evidence and make a decision to whom payment should be made. Invariably, payment will remain with the landlord unless the tenant can demonstrate some good reason for redirection.
The draft regulations, as they stand, provide no such safeguards against the type and level of misuse already experienced in LHA and Universal Credit. Landlords should have the ability to influence the question of to whom payment should be made so that the potential for payment misuse is kept to a bare minimum, protecting the public purse in the process.”
Hopefully, the links above and my associated comments may assist you in the compilation of your own response.
If you have any queries about this or any other welfare reform topic, please get in touch firstname.lastname@example.org or 07733 080 389. We also provide specialist in-house training on all aspects of the welfare reforms. You’ll find various programmes in our training section of the website.
UC Advice & Advocacy Ltd