The Department for Work and Pensions has published the latest newsletter for landlords who let properties to tenants who are in receipt of Universal Credit. You can read The Department for Work and Pensions Guidance on Universal Credit and rented housing: Guidance for landlords here for more information.
Recovering Rent Arrears and Service Charges from Universal Credit
Arrears of rent and service charges for the property the tenant is currently living in are included in the list of deductions that can be made from a Universal Credit payment.
If your tenant has accrued rent arrears to the value of 2 month’s rent or more, you can request a managed payment or rent arrears deduction.
The maximum rate at which deductions for rent arrears can be made is 20% of the Universal Credit standard amount.
The rate used will depend on the claimant’s circumstances. Only the claimant can request a change to the percentage rate by contacting Universal Credit.
The UC47 forms have been updated to include a box to add the landlord email address and a contactable phone number if further information is required.
How DWP will pay rent arrears deductions to the landlord?
If a request for managed payment or rent arrears deducted is approved, rent arrears deductions will be paid under the third-party deduction (TPD) scheme.
Once payments are set up on the third-party payments system, you will normally receive payment every 28 days and will be 28 days in arrears.
The payment will appear as a single transaction on your bank statement along with a reference number (settlement number), you will then receive a third-party deductions schedule with a breakdown of all the individual transactions which make up that payment and their associated references.
The first payment is normally received within 6 weeks from the date deductions commence.
A Bank Automated Clearing System (BACS) payment will be paid into the bank account nominated by the landlord.
If your tenant is in arrears you can also request your tenant to seek discretionary housing payments.
Universal Credit claimants can contact their local council and apply for a discretionary housing payment. This payment gives the claimant additional financial support so that they can meet a rent shortfall or other housing costs. The decision on whether to award a discretionary housing payment rests with the local council.
For details of how to receive payment schedules, an information pack or further information about electronic schedules email: [email protected]
You can read more about what Universal Credit is in our previous newsletter here: https://landlordadvice.co.uk/credit-universal-rent-arrears/