UK

Government Confirms Yet Another Universal Credit U-Turn

Victory for campaigners.

23/11/2017 14:02 GMT | Updated 23/11/2017 16:06 GMT

A further U-turn on the government’s beleaguered Universal Credit reforms was confirmed today in a victory for campaigners.

Work and Pensions Secretary David Gauke confirmed on Thursday that rent payments would now continue to be paid directly to landlords rather than to tenants, answering concerns over soaring personal debt.

In a statement to the Commons, Gauke said: “[For] those people who already have an alternative payment arrangement, the presumption will be that [it] will continue and the money will therefore go to the landlord rather than the tenant.”

Parliament
Work and Pensions Secretary David Gauke told the Commons that landlords would now be paid directly as a default

The policy comes with an opt-out for claimants who may wish to receive rent directly.

The change comes in addition to a change announced during Wednesday’s Budget which will see Housing Benefit paid for a further two weeks after a person begins their Universal Credit claim.

Just under a third of all Housing Benefit claimants have their rent paid directly to landlords, equivalent to some 1.3m people according to latest statistics. 

However, under Universal Credit, most claimants saw rent payments paid directly to them.

Campaigners said this led to soaring levels of rent arrears and contributed to food bank use.

And a majority of private landlords said they were less likely to agree to rent their properties to those receiving Universal Credit.

Citizens Advice found (pdf) those Universal Credit claimants it helped were 14 percent more likely to have problems with priority debts like rent and Council Tax compared to those on older benefits.

And welcoming the announcement, the Residential Landlords Association’s Vice Chair, Chris Town, said: “This is a welcome change and will mean that tenants who choose, can be secure that their rent has been paid and landlords have the confidence to rent out housing to those claiming benefits.

“It is good to know that Ministers have clearly listened to the concerns of landlords and tenants.”