U-turn over paying housing benefits direct to landlords

A dramatic change to government policy means automatic direct payment of housing benefit to landlords is now allowed.

With the first universal credit pilot scheme going live in Ashton-under-Lyne, the Department for Work and Pensions sent out a circular to housing benefit staff.

This revealed that automatic direct payments are now allowed in pathfinder areas – the places where pilot benefit schemes are running.

The update was welcomed by the Residential Landlords’ Association (RLA) and is good news for landlords with tenants receiving housing benefit.

The move gives some reassurance that landlords will not lose out if tenants fall into arrears.

The document sent to housing benefit staff explains that landlords can refer any rent arrears cases to universal credit, and those that are over two months in arrears will be switched to direct rent payment to landlords automatically.

If the arrears are under two months, then the claimant will be contacted to discuss the non-payment and personal budgeting.

It is a welcome change in policy, says the RLA, as previously direct payments to landlords were only allowed in specific circumstances, and were not automatic.

RLA policy director Richard Jones explained this is a significant change in attitude and acknowledges that paying housing benefit direct to landlords is crucial in the reform of the welfare process.

But the change foes not extend to the national introduction of universal credit, which will happen later this year.

The RLA will continue to lobby for this, and for a shorter time period to trigger automatic direct payments.

For landlords with tenants on benefits it is important they know that any arrears will mean a stop on further payments to the tenant until direct landlord payments have been set up.


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