Why is housing benefit stopped when claiming Universal Credit?

The difficulties facing people on Universal Credit are now widely known. People making a claim are faced with a wait of 6 weeks or more before they get their first payment. One of the critical components of UC is the housing element which replaces housing benefit (or local housing allowance for private tenants). An application for UC is treated as a new claim which means that somebody who has previously been receiving housing benefit suddenly finds it stopped. This inevitably means that, unless they have some savings, they are cast into rent arrears. The poorer somebody is then the more difficult it is for them to extricate themselves from debt, which, in this case, is no fault of theirs. Even though advance payments can be issued (the DWP kept this quiet for a long time) it is a loan which has to be repaid over 6 months.

The scale of the problem can be seen by what is happening in Swindon. According to information given to the “Swindon Benefits Strategy & Welfare Reform Group”, 50% of rent arrears of council tenants is owed by the 977 tenants in receipt of HB; some £600,000, an average of more than £600 each. This is income lost to the Housing Revenue Account which runs council housing. It is needed to maintain and renew existing council housing. Even more worryingly there are 3,000 working age tenants in Swindon still to transfer to UC. Imagine the potential arrears that are likely to be accrued when these people are transferred.

UC has to be completed online. Local libraries are helping people with initial claims, but the October Welfare Reform Group was told that “claimants are struggling to maintain their digital journals” which record everything they do. “Claimants need support in maintaining claims.” Concern was raised at the meeting that the Libraries that were being transferred from ownership of Swindon Borough Council were being advised that their broadband connection was being closed and the PCs removed, before they could introduce replacements.

The impact of the UC wait for money has been reflected in the report of Swindon’s Foodbank of a large increase in numbers visiting them, many of whom have said that they were there because of UC. Some residents were reporting a 10 week wait to get their payments.

Discretionary Housing Payments (grant received from central government) are available for UC claimants, though as the name says, it is discretionary. £80,000 had been committed to people on UC by October 6th1.

In the case of people who have been receiving HB before they move onto UC, the question arises why is their HB stopped? What logical reason could their be to place poor people under severe stress induced by not being able to pay their rent. We know in the case of Swindon Council staff are chasing up people on UC pressing them to pay their rent at a time when they have no benefit income, and many of them little or no money.

It is the height of bureaucratic stupidity and callousness to treat people in this way. There is little more worrying that the prospect of being turfed out of a house because of rent arrears. Surely it would make sense when a UC claim is made for the person/household’s HB/LHA to continue to be paid to the landlord so that they are not thrown into arrears. If any adjustment had to be made then it could be done when the claim was complete and the claimant was receiving their payments.

Martin Wicks

November 2nd 2017

1The figures for DHP at October 6th were: £4,515 General Shortfall in Benefit, £69,283 for Local Housing Allowance Reforms, £90,526 for Under-occupancy (bedroom tax), £115,623 Benefits Cap, £80.970 Shortfall in Universal Credit.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.