UC- DWP maladministration of direct payments to landlords

To: Mr Chris Stephens MP House of Commons, London, SW1A 0AA Date: 26.10.18

Dear Mr Chris Stephens,

Universal Credit – DWP maladministration of direct payments to landlord problems causing financial hardship & homelessness. 

I am in your constituent and in the private rented sector providing housing to numerous individuals and families.  Most of those individual and families are gradually transferred to Universal Credit if they are currently on LHA (Local Housing Allowance).

I am encountering problems with the DWP mis-handling and my tenants UC and was wondering are there anything you can do within your position to make any changes to this.

With some of my existing tenants receiving Housing benefit assistance, I have some tenants who are in some troubled background eg gambling, drugs and alcohol addictions and money management issues to mention a few.  They have their HB Safeguarded to be paid direct to the housing provider from the beginning of the tenancy date to avoid mis-use of the rent money and risking their housing.

The problem I am encountering is I am not informed when an existing tenant is transferring to UC by the HB or UC office nor the tenant. Basically kept in the dark until around 1 month after the HB is stopped by that time the UC office pays the 1st payment of the ‘Housing cost element’ to those tenants bank account.

In factual cases, most tenants spend that rent money and do not transfer it to the housing provider for rent.

This is despite all the tenants informed me when I do find out that during their UC meetings at the Job centre, they repeatedly asked for the Housing cost to be paid to the landlord and were told by the work coach to ‘leave it with them to arrange’ but nothing is ever done to make sure it is safeguarded from the ‘start’ but always after a payment is made to the tenant.

In some cases, if I find out early enough or it is a new tenant, I email the UC office with their APA (alternative payment arrangements) UC47 form some while ‘before’ they actually paid the 1st payment to the tenant.  In all cases when I do find out, the UC47 form is emailed to the UC office.  I never get a response from the DWP to make arrangements.

So far whether the tenant or I request direct payment of the housing cost to the landlord, the DWP pays the tenant the 1st months housing cost and typically hold back on other benefits elements of the UC payment which in effect encourages the tenant more to use that rent money instead of paying it to the housing provider.

One factual example I have is tenant A with a trouble history who was homeless and we agreed to house her and her child through the Rent Deposit Scheme setting up a payment plan for her to pay up her deposit and pay her small amount of rent shortfall £26.24pm.  She struggled and not paid either.  Her HB was safeguarded to be paid to the landlord so in large things are still fine for us to cope with.  But she was transferred to UC without my knowledge and received £479.26.  After pre-informing her of this payment coming and a weeks of requesting that Housing cost for the rent to be paid to us, she transferred £40.00 to us from that rent money and spent the rest.

I had another tenant, tenant B who received £499.95 in July 18 of the UC housing cost for rent and only paid me £200.

Both tenant A & B stated they both requested the housing cost to be paid direct to the landlord from the beginning first payment.  Both stated when they received the 1^st payment for the rent, the UC held back other payments which made them short of money with all the cash in rent sitting in their bank account.

In both cases the tenant has not made arrangements to repay that money the DWP paid them back to me to allow me to pay for outlays and operational costs.

Tenant A received a Notice to Quit as a direct result of this final arrears building up as she has not been paying her rent shortfall for some while and had rent arrears building up before this payment was put into her bank account. This is most likely going to lead her to homelessness again.

There are policies and legislation in place to allow the DWP to pay the landlord the housing cost of the UC direct like the APA as well as the Scottish Choice introduced by the SNP.

The problem is despite all those mechanism and the requests of the tenant and the landlord, the DWP still pays the tenant at least the 1st payment of the housing cost causing major problems and that is when both landlord and tenant have requested for this arrangements.

And also in tenant A’s case, the DWP should have carried out basic fact find to find out is the current set up paid direct to the landlord and if so there are normally valid reasons for that to be in place and should not ignore such existing set up and go on to pay a tenant the rent when she is already in trouble of rent arrears and the background of being homeless etc.

The problem is the DWP totally ignore and bypass of of those facts, logic and proceed to credit the tenant the housing cost defying what was in place to safeguard the housing cost for a long time from the beginning of her tenancy.

This is only one case of many.

I have written to the DWP to complain about this already to ask them to improve their administration and handling of the direct payment to landlord from the 1st day and payment of the tenancy onwards in future but was told that they MUST pay the 1st payment to the tenant while I read on all the policies and legislation but can not find any piece that say they can not set up direct payment from the 1st payment to avoid misuse of the rent in numerous cases and can lead to homelessness.

When I query about that, they said this is the policies and legislation to pay the tenant direct the 1^st payment and asked me to revert back to you for changes in the future to avoid more people going in to financial hardship.

This issue is affecting more and more individuals and families in the local area and nationally and needs to be addressed.

I would really appreciate if you can give some thoughts to this and give me a feedback as this problem will only exacerbate continue if left.

I look forward to your response.

Thank you in advance for your time.

Kind regards,

Alan

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