This week, Secretary of State Thérèse Coffey took questions from the Economic Affairs Committee on the economics of Universal Credit. As part of this she told MPs that she does not want to see a return to the widespread use of direct rent payments to landlords with tenants in receipt of housing benefit, despite praising the new online Alternative Payment Arrangement system which makes setting up direct payments much quicker.
Caridon Landlord Solutions, which worked alongside The Department for Work and Pensions (DWP) to pilot the new online system says this is not only disappointing for landlords but will be detrimental to tenants in receipt of Universal Credit.
Sherrelle Collman, Managing Director of Caridon Landlord Solutions, comments:
“We fully understand that one of the key objectives of the introduction of Universal Credit was to simplify the system and make work pay, giving those in receipt of Universal Credit a monthly payment, mimicking how many people in full-time employment receive their salary and preparing them to manage their finances.
However, we know from experience that rent arrears have not only increased since the introduction of UC, but also a large proportion of claimants are falling into arrears within the first couple of months. Whilst it is important to empower tenants and provide support into independent living, making direct payments to landlords more difficult to access puts the most vulnerable tenants at greater risk.
Without the confidence to let to tenants in receipt of Universal Credit, landlords will turn their backs on this sector and at a time when there is a record number of people in receipt of Universal Credit and rising unemployment as a result of the global pandemic, we should be doing all we can to help make managing finances easier.”