Universal Credit is coming!

So there is a way to reclaim for arrears!

A very good informative website. Much clearer to understand than many other sites. 

https://universalcreditadvice.com/private-landlords/2015/04/recovering-rent-arrears-through-third-party-payments.

In an earlier bulletin I explained how the DWP had introduced a new scheme of “Third Party Payments” for Universal Credit. Since then DWP has produced a TPP handbook which you'll find here. I’ve also been asked a series of related questions, by website members. Most have been posed by social landlord staff involved in income management, rent arrears control, and, on quite a few occasions, tenancy sustainment.

To recap, what I said in my earlier note:

Under Universal Credit scheme, landlords will be able to apply for TPPs from tenants' Universal Credit, at the rate of 20% of their Standard Allowance, although, in most cases, the deduction is likely to be capped at 10% or 15% because the tenant has other secondary debts, like Gas/Electricity, Council Tax, Social Fund loans, Court Fines. The potentially much higher deduction creates the prospect of having existing "rent arrears" debt, cleared much quicker than is currently possible.

The Standard Allowance for Universal Credit, is calculated on a calendar monthly basis, and varies depending on the age & status of the claimant. Currently the amounts are:

*Single claimant, under 25 - £246.81 - deduction @10% = £24.65pcm or £49.30 @ 20%
*Single Claimant, over 25 - £311.55 - deduction @ 10% = £31.15pcm or £62.30 @ 20% 
*Couple both 18-24 - £387.42 - deduction @ 10% = £38.70pcm or £ 77.40 @ 20%
*Couple where one is 25 - £489.06 - deduction @10% = £ 48.90pcm or £97.80 @ 20%

Question 1. Are deductions automatic?

Deductions are not automatic. Landlords have to demonstrate, it’s in the interests of the tenant and any dependents he/she may have, to have deductions applied and that their own attempts to secure recovery have proved unsuccessful. Normally, where there is evidence of misspending, persistent late/non-payment and broken agreements this will suffice for DWP purposes.

Question 2. What happens if there are a number of competing debts?

UC regulations provide a hierarchy of: a) Housing costs; b) Service charges; c) fuel costs; d) Community Charge & Council Tax; e) court fines etc. etc. So rent arrears are always considered the top priority!

Question 3. Is there a level of rent arrears prescribed before payment can be made?

Landlords have to demonstrate that the current level of rent arrears amounts to at least 2 months’ rent, accrued at the current address. Once authorised, landlords receive payment 4 weekly, in arrears, until such time as the debt is cleared. Payments will stop as soon as the debt is cleared or where the tenant vacates that landlord's property. 

Question 4. Can a landlord ask the DWP to pay just 10% of the appropriate standard allowance even where a 20% deduction could be made?

No. Landlords cannot propose the rate at which deductions are made. Where third party deductions from Universal Credit are in place to recover rent arrears, regulations provide for an amount equal to between 10% -20% of the claimant’s standard allowance depending on what other deductions are in place. However, landlords are not compelled to apply for TPPs and can seek to make their own arrangements with tenants for repayment of rent arrears, deciding and agreeing the terms of recovery with their tenant. If tenants are aware of the threat that TPPs could be imposed if they default in payment they might just keep to their voluntary arrangement.

Question 5. What happens to TPPs when a sanction is imposed?

In the case of rent arrears and fuel debts, DWP can still continue to make deductions, even where there is a 100% sanction applied to the tenant’s Standard Allowance. Continuing deductions, in this way, is designed to protect the tenancy and avoid the fuel supply from being disconnected.

These are just a few of the questions posed by members of my website www.ucadvice.co.uk If you have a question about Housing Benefit, LHA or Universal Credit you can post your questions here:https://universalcreditadvice.com/housing-associations/forums

https://universalcreditadvice.com/private-landlords/2015/04/recovering-rent-arrears-through-third-party-payments.