Despite concern from some Members of Parliament, it has been confirmed that housing benefit will be paid directly to claimants living in rental accommodation as part of the new Universal Credit scheme.
Opponents have argued that this move will create more rental arrears, with private landlords losing their guaranteed monthly payments.
Local Housing Allowance
The Residential Landlords Association (RLA), along with charity organisation Shelter, has fruitlessly campaigned for more choice regarding payment of Local Housing Allowance. This benefit is currently paid to benefit-receiving tenants residing in private rented accommodation.
Both the RLA and Shelter believe that tenants should be afforded a choice concerning whether or not Local Housing Allowance is paid to them or their landlords. In addition, they believe that this choice should include Universal Credit.
Stockon North’s Labour MP Alex Cunningham raised these concerns in Parliament. However, benefits minister Iain Duncan-Smith believes that tenants on benefits deserved more respect and suggested that by paying benefit payments directly to them, they would become more financially aware.
Rent Paid to Tenants When Universal Credit Comes In
The Parliamentary exchange between Cunningham and Duncan-Smith is outlined below:
Alex Cunningham MP: “As other hon. Members have mentioned, the introduction of Universal Credit will mean that housing benefit will be paid not directly to landlords but to tenants, and that it will be paid monthly rather than fortnightly, causing tenants to go into substantial arrears.
“Does the Secretary of State agree that, when assessing whether a claimant is vulnerable enough to be exempted from monthly payments and receiving their housing element directly, it should be standard practice to consider the feedback of third parties such as social services and voluntary sector services as well as claimants?”
Iain Duncan-Smith MP: “I do, yes. We want to pay people directly, and we already pay local housing allowance to such tenants directly, which the hon. Gentleman and all hon. Members should remember. The vast majority cope with that payment, they are very similar.
“The point is this: we do not intend to cause problems, but the more we continue to treat people in receipt of benefits like children, the less likely they will be able to cope when they go to work.
“Those who can, absolutely must get on to that payment schedule, but we will obviously talk to all the bodies to which he referred to ensure that we identify those who cannot. If people cannot get on to that schedule, we want to surround them with help and support to find out why they cannot manage their payments, and to rectify that rather than just throw money at them.”