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Universal Credit - benefit payments to be made directly to landlords in Scotland

Monday 30 January 2017

Earlier this month the Scottish Social Security Minister Jeane Freeman MSP announced that people in receipt of Universal Credit will have the choice of making the housing element directly payable to their landlord. The measure will be available to both tenants who let property from private landlords and those in social housing.

Furthermore, new applicants of Universal Credit who live in Full Service areas will have the option of having their benefits paid on a bi-monthly basis, rather than monthly, as is the current Universal Credit policy administered by the Department for Work and Pensions (DWP).

Universal Credit is being introduced in stages across the UK and in certain areas the Full Service is available to all types of claimants. This means that they have an online Universal Credit account to manage their claim. Eventually all Universal Credit claims will be on the full service and they will have a Universal Credit online account. The Universal Credit Live Service is managed over the phone.  

Social Security Minister, Jeane Freeman MSP, said:

“As part of the social security consultation exercise last summer, we heard directly from people that paying the housing element of Universal Credit direct to landlords and receiving more frequent payments would be two important improvements to the DWP approach. These are issues that people have repeatedly raised with us, highlighting the problems the current system can cause for budgeting.

“I am delighted therefore that I am able to address these concerns and go further, by extending the direct payment option to tenants with private landlords, and deliver these flexibilities for people in Scotland. 

“People claiming Universal Credit want to have a choice about how the housing element part of the payment is paid – we have listened to that wish and are now taking action to make sure it happens as quickly as possible.”

The changes reflect the new social security powers for the Scottish Government under the Scotland Act 2016. A consultation is expected to be launched in the coming months to look how the new rules will work.   

Commenting on the announcement, ARLA Managing Director David Cox, said:

“We have long called for a level playing field between the private rented sector and the social rented sector when it comes to housing benefit. We welcome this initiative from the Scottish Government which will allow the housing element of the benefit to be paid direct; preventing people on Universal Credit from falling into arrears. Furthermore, the ability for people in full service areas to get payments twice monthly will help them budget.”

Universal Credit (UC) is a new benefit brought in via the Welfare Reform Act 2012 to support people who are on low incomes or out of work. UC replaces six existing benefits (Income-based Jobseeker’s Allowance; Income-related Employment and Support Allowance; Income Support; Child Tax Credit; Working Tax Credit; Housing Benefit or Local Housing Allowance).

The new system is based on a single monthly payment (rather than every two weeks) paid in arrears directly to a bank account. Payments include all eligible housing costs meaning that claimants will be responsible for paying their rent themselves.

ARLA members can download a Fact Sheet explaining what Universal Credit is and how it works in the members’ area of the ARLA website. This is a unique member benefit only available to ARLA members.

ARLA attends regular meetings with the Department for Work and Pensions about Universal Credit and how it is being rolled out across the UK. We have highlighted the importance of Universal Credit Work Coaches asking the right questions and ensuring claimants know they can use the direct payment option. It’s also important that we see more Alternative Payment Arrangements (APAs) coming from Work Coaches in order to passport information and help vulnerable tenants.   

If members have comments or concerns about Universal Credit they should contact ARLA Policy and Campaigns Officer Tim Douglas at timdouglas@propertymark.co.uk