Claimants could face a 20 per cent cut to their Universal Credit payments if they fail to pay their rent

19th November 2014

A government support pack published on 13/11/14 giving social landlords practical advice for preparing their tenants for the roll out of Universal Credit, has announced that the DWPcould cut 20 per cent of a claimant’s benefit if they fall into arrears.

Previously the DWP could deduct 5 per cent from claimants, an amount that would then be paid directly to the landlord. The new benefit is designed to give claimants more independence and ‘financial responsibility’ through paying housing benefit directly to them. However it is feared by many housing organisations and landlords that the system will increase arrears difficulties, reports 24dash.

Minister for Welfare Reform, Lord Freud has said: ‘UC is now available in one in ten Jobcentres and will be in almost 100 by Christmas, with national roll-out beginning early next year – so now is the ideal time to boost preparation activity.

‘For the first time many tenants will be paid their housing benefit directly and I would encourage landlords to think about identifying tenants who need support to prepare for this, and put those who are ready onto a direct payment early.’

This announcement comes in the same week that the Guardian reported on figures from the Ministry of Justice revealing that over 30,000 tenant households had lost their homes between July and the end of September this year, stating that this is ‘the highest quarterly figure since the records began in 2000’. Local councils and housing associations are warning that these figures are caused by the introduction of the bedroom tax, a policy whichthe Independent reports has come under further criticism this week from Church of England leaders