DWP gives tenants a ‘rent arrears holiday’ as it suspends third party payment collections from Universal Credit

Department of Work and Pensions says latest change will help streamline the overloaded benefits system as it faces unprecedented demand from claimants, but landlords say this will delay how long it takes to recoup unpaid rent.

The Department of Work and Pensions (DWP) has confirmed that third party deductions from Universal Credit (UC) payments are to be suspended until May 10th as Ministers attempt to streamline the system.

This, the DWP claims, is designed to free up civil servants to process the hundreds of thousands of additional benefit applications received during the Coronavirus crisis.

Third party deductions are usually taken from payments to pay rent and other bill arrears, including council tax.

But the change will mean thousands of landlords who are owed back-rent by tenants in receipt of Universal Credit will now have to wait longer to get their money back.

Although housing associations have been told about the change, private landlords are left to fend for themselves when significant decisions like this are taken by the DWP.

No communications

“Private landlords get no direct communication about UC in any shape or form from the DWP and, for example I’ve had four of my tenants lose their jobs and begin receiving benefits recently but no one from the DWP has been in contact to tell me about when I’m going to get the housing element of those payments,” HMO landlord Nick Sturgeon tells LandlordZONE.

“I find it frustrating that tenants are having the personal element of their UC payment fast-tracked d during the crisis, but landlords are being ignored.

“Coronavirus has exposed the weaknesses in the UC system and makes people like me wish yet again that Housing Benefit was still in place.”

Cost of rent

Ben Beadle, Chief Executive of the National Residential Landlords Association says: “At such a difficult time the priority should be to do everything possible to prevent tenants getting into rent arrears in the first place by ensuring tenants are able to continue paying their rent in full.

“This means that the Government should ensure benefits cover the full cost of rents, end the five week wait for the first payment of Universal Credit and pay the housing element of the Credit directly to landlords.”

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