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27 June 2013

Universal Credit protection for tenants and landlords

Speaking at the Chartered Institute of Housing Annual Conference in Manchester today, Lord Freud outlined the support for Universal Credit claimants who will receive direct housing payments, how DWP will work with social landlords to identify tenants who should be exempt and when action will be taken if tenants fall into arrears.

Lord Freud said:

"Letting claimants pay their own rent is an important way of breaking down barriers to help people into work. I believe that these measures strike the right balance between ensuring that both the tenant and landlord are protected, but also gives individuals some time to get to grips with direct payments.

Three levels of protection will exist:

- Decisions about whether tenants should receive direct payments will be made in collaboration with social landlords
- If arrears build up to the equivalent of 1 month’s rent the decision to make direct payments will be reviewed
- If arrears reach the equivalent of 2 months rent, the claimant will have housing payments switched to the landlord, or managed payments

Lord Freud added:

"The key to making direct payments work will be our on-going collaboration with landlords, but I am determined that managed rent payments should not be a permanent solution. Once arrears have been paid, we will look to return tenants to direct payments, with the right support in place. Once arrears have been cleared, the DWP will work with landlords to return tenants to direct payments. In most cases, following the tenant being offered budgeting support, they will return to direct payments within 6 months of the arrears being paid off. These safeguards were developed following findings from the Direct Payment Demonstration Projects that are currently running in 6 areas across Britain."

Amanda Oliver, Head of Policy and Research at Community Housing Cymru, gave her reaction to the announcement, saying:

"CHC very much welcomes the decision by the DWP to collaborate with landlords about whether tenants should receive direct housing benefit payments and we feel this is a big step forward from the original position. However, we still believe that tenants should be able to choose whether the payment goes directly to the landlord ”