Tenants fear owing rent arrears in benefits shake-up

Tenants have given the proposed universal credit the thumbs down in a massive vote against directing rent payments to tenants rather than their landlords.

In a survey of the impact of universal credit on social housing tenants by the Social Market Foundation (SMF), 93% admitted they would prefer landlords to receive their rent payments direct because they are worried about managing their own money and the risk of falling in to debt.

“The government’s laudable aim that universal credit should prepare families for work, boost their resilience to financial shocks, and simplify the system is at risk of backfiring,” said Dr Nigel Keohane, SMF Deputy Director and co-author of the report Sink or Swim – The Impact of The Universal Credit

“By moving to a single monthly payment for all benefits, the Government is removing the markers and aids that families currently rely on to budget effectively. Our research shows that this will throw people in at the deep end leaving them either to sink or swim.

“This laissez-faire approach will create real problems not only for families themselves, but also for public service organisations, such as social landlords and childcare providers, that families will end up owing money to.”

The SMF also claims:

  • Most opposed moving from weekly or fortnightly benefit payments to a monthly payment, as they are concerned they would run out of money before the end of the month
  • Most do not want to manage their rents, because of worries they might end in debt or risk running up rent arrears or even eviction
  • Someone made jobless could go for more than a month without any money if weekly payments are stopped, increasing their debts

“There was widespread opposition among our households to the planned changes to housing benefit, under which they would receive money in respect of their housing costs and be expected to manage payment to their landlords,” said the SMF report.

“Many expressed the fear that households would be unable to manage their finances effectively and would overspend, leading to rental arrears, possible eviction and further indebtedness.”

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