Private landlords have doubted that the DWP understood the tenants who they felt they helped by paying rent to the tenant under Universal Credit. This seems proved as, from 26th November, they will deduct 20% of the non-housing related benefit where tenants fall 8 weeks in rent arrears, with the sum collected being paid to the landlord to reduce the rent arrears.
A tenant under 25 will lose £50 per month with a couple losing £100 per month; for families with children living them, the sums would be even more. Considerable reductions which could lead to the horrors of loan sharks, stealing or quitting tenancies.
Empowerment, it seems, works when it comes to paying the rent, but not in re-paying a debt. In fact, it could be seen as disempowering of those good housing officers and landlords, who previously accepted that anyone can be tempted and fall into arrears, but worked with them to negotiate a payment plan themselves without recourse to penalising them to the extent that a 20% deduction would.
Social landlords have found their rent accounts worsening and their future funding at threat, but even they feel 20% is too much. The National Housing Federation campaigned on a basis of a 10-20% deduction, conditional on the option that social landlords could ask for lower payments where 20% would lead to hardship, but this was not acceptable to the DWP who went for a 20% deduction.
From 26th November, if a landlord informs the DWP that a tenant is 8 weeks in rent arrears, a 20% deduction will apply. Will this be the same case for private sector landlords? Time will tell, but in the spirit of equalising the situation between private and public sector, it should do. We can look forward to newspapers headlines labelling social landlords as “money-grabbing” and “rogues”, perhaps?
Is this intended as a means of collecting rent arrears or as a dis-incentive to the arrears accruing in the first place? Private landlords need to be aware of this legislation and make sure tenants know about it too – the sums taken will have a disastrous effect on their finances, stretched to the limit even without deductions.
By Sharon Betton