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29 January 2019

CHC urges Universal Credit amendment to ensure tenants aren’t underpaid

Welsh Housing Association tenants could be underpaid a week’s rent due to the way the current Universal Credit system is set up.

Under the Housing Benefit system, housing costs are paid weekly. Under Universal Credit, payment cycles are monthly, calculated by multiplying weekly payment by 52 and dividing by 12.

Most social landlords collect rent each Monday – and in the rent year 2019/2020 there will be fifty-three Mondays. This reoccurs roughly every 5 years due to a normal year being 52 weeks and one day, and a leap year 52 weeks and 2 days.

There are over 13,000 social housing tenants currently claiming Universal Credit in Wales. These tenants will be one week short of rent this year, and will have to find the shortfall from other sources to pay their rent for the 53rd week.

We are proposing an amendment to the UC system, so the new formula for calculating the monthly housing element of UC is the total annual rent owed, divided by 12. This will fully support tenants, regardless of the number of rent weeks in the year.

Will Atkinson, Policy and Programmes Manager at Community Housing Cymru said:

“The Housing Benefit system was designed to ensure that people on low incomes renting their homes can afford to pay their rent on a weekly basis. Its replacement, Universal Credit, is currently failing to cover this basic requirement for tenants.

We are calling on UK Government to change the formula for calculating Universal Credit, to ensure that every rent payment is covered.

This simple change would enable UC payments to flex year on year with the number of rent weeks and rent levels. If the system stays as it is, tenants will need to find other sources of income, and if they can’t find the money they will fall into arrears, through no fault of their own.”