Major success for landlords in redirecting “housing costs” of UC
Landlords are celebrating a major success after the Department of Work and Pensions (DWP) changed instructions for staff handling the “housing costs” element of Universal Credit.
Those landlords who make use of the Alternative Payment Scheme (APA) to redirect a tenant’s “housing costs” will benefit after the DWP confirmed that “explicit consent” will no longer be required to progress requests.
Prior to this, the department insisted that “explicit consent” from the tenant was a requirement before an APA application could be progressed.
As a result, thousands of landlords in the social and private sectors lost huge amounts of rental income while tenants either delayed or refused consent.
It is thought that many were accessing and misusing their "housing costs” at the landlords’ expense. Alex Huntley, Head of Operations at Simple Landlords Insurance, said: “We know Universal Credit is something that has been worrying landlords – particularly larger landlords – with 29% citing it as a key concern in a recent survey.
“The removal of the explicit consent clause is great news – but it hasn’t been made into a public announcement and not everyone will be aware of the change.
“It also goes to show what effective opposition from the Private Rental Sector can actually achieve.” One of the campaigners behind the change is Bill Irvine, of UC Advice & Advocacy Ltd, the Residential Landlord Association (RLA) and Caridon Property Services. His work to highlight what was happening saw complaints pursued through the DWP’s “Complaints Process” - and then seven cases were referred to the Independent Case Examiner (ICE).
Mr Irvine said: “Each case exposes hundreds of pounds in rental loss, despite DWP’s knowledge of what was happening, and are all related to serious flaws in both the APA and complaints processes. “RLA meet regularly with the DWP, and its directors and members have been constantly lobbying for a range of changes as the current arrangements are still not fit for purpose.
“DWP’s Complaints and Resolution staff, in conversation with our clients have often expressed considerable sympathy to the landlords’ predicament.
“They recognised the absurdity of the situation, whereas, DWP’s hierarchy simply continued to try and defend its indefensible position.
“The Game-changer, in my opinion, was the submission of the detailed referrals to ICE, as this is the first truly independent stage in the "Complaints Process" which prompted exchanges with DWP seeking explanations.
“ICE has a track record of being highly critical of the DWP administration, finding in favour of the complainant in 50 per cent of past referrals.
“Following DWP’s revised instructions to staff, we’re now even more confident, ICE will find merit in our argument, DWP is guilty of maladministration, causing landlords wholly avoidable rental loss, and will recommend suitable compensation for landlords, as currently happens with Housing Benefit.
“We also believe, an ICE recommendation, to this effect, could also force DWP to compensate the many copycat cases that exist, so it’s vitally important landlords continue to pursue complaints through DWP to ICE.”
He said that removing “explicit consent” in relation to APA processing, represents “a major success for social and private landlords,” and should ensure future requests are processed much quicker.
It should also help to avoid a repeat of the substantial losses seen in the past two years, although it may take time for the message to trickle down to advisors.
“We suspect many DWP frontline staff will still be oblivious to the new guidance and may be unintentionally frustrating new APA requests,” said Mr Irvine.
Current complications with Universal Credit
The controversial new benefit rolls Jobseeker’s Allowance, Employment and Support Allowance, Income Support, Working tax credit, Child tax credit and Housing Benefit into one monthly payment. It was designed by Tory minister Iain Duncan Smith to “ensure benefit claimants are always better off overall in work,” but has faced a barrage of criticism because it takes six weeks for the first payment to arrive – creating havoc for claimants and landlords, alike.
The live service - an 'in-between' form of UC that enrolled mainly people with simple cases, such as single childless jobseekers - has been closed to all new benefit claimants, nationally, since January 1. That means Jobcentres once again have to put new claimants back on the old system of 'legacy' benefits like Housing Benefit or Jobseekers' Allowance.
Explaining the move, a DWP memo said: "It is not value for taxpayers’ money to continue to invest in a system that is due to be closed and replaced."
The shutdown was always planned, but appears to have been brought forward urgently to coincide with a £1.5billion package of help for claimants.
Chancellor Philip Hammond announced he would double the advance loans available to claimants, from this week, and shorten the six-week wait to five weeks, from February.
Officially, the DWP says it wants to "focus" its efforts on giving out the new package of help, but opposition politicians have blasted the “chaos” involved in the reforms.
Shadow Work and Pensions Secretary Debbie Abrahams said: "The cuts and design issues associated with Universal Credit are being matched by the Government’s incompetence in its delivery. "They need to pause the whole programme and fix it now."
A DWP spokeswoman said: “This transition has always been planned, and as we announced at Budget, we have changed the schedule so we can focus on implementing the £1.5 billion package of improvements for Universal Credit as quickly as possible.
“We have already improved the advances system so people can receive 100 percent upfront and will be removing the seven waiting days at the start of a claim, reducing the wait for the first Universal Credit payment.”