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Universal Credit sends rent arrears soaring – reports

  • 18/09/2017
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Universal Credit sends rent arrears soaring – reports
An exclusive report in The Observer on the weekend revealed the government’s flagship welfare reform programme Universal Credit is leaving thousands of welfare tenants unable to pay rent and at risk of homelessness after late benefit payments.

The report suggested Ministers are under intense pressure to halt the scheme after a raft of concerns from landlords, councils and charities about universal credit, which have been handed to a parliamentary inquiry investigating the programme.

Rent arrears among tenants receiving universal credit are running at three, four or even five times the level of those on the old system, warn whistle blowers. The report suggested three councils whose tenants have already been moved on to universal credit have already built up £8m in rent arrears. Croydon, Hounslow and Southwark said that more than 2,500 tenants claiming it are now at risk of eviction.

Figures obtained by the paper under the Freedom of Information Act also show that half of all council tenants across 105 local authorities who receive the housing element of universal credit – which replaces housing benefit – are at least a month behind on their rent, with 30% two months behind.

By contrast, less than 10% of council tenants on housing benefit are a month behind on their rent, with under 5% running more than two months behind.

Evidence submitted to the work and pensions select committee’s inquiry into universal credit highlight two main problems, including the six-week wait before claimants receive their first payment, with widespread reports of some claimants waiting even longer.

Secondly, the new system also sees money for rent going to tenants, rather than straight to their landlords. While the Department for Work and Pensions (DWP) said the measure is designed to encourage claimants to manage their money, landlords are warning that it is simply leading to rising rent arrears.

A DWP spokeswoman said: “Universal credit is getting more people into work than the old system. It mirrors the way most people in work are paid, helping to ease the transition into employment. The majority of claimants are comfortable managing their budgets, and for people who need extra support, advance payments are available.”

See the full report here.

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