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Universal Credit tenants owe double in rent arrears

Thursday 15 November 2018

Council tenants on Universal Credit owe more than double the rent arrears of those still on housing benefit, a BBC probe has found.

Flintshire council in north Wales, one of the first counties to test the new payment, says rent arrears have gone up by £1m, with one claimant saying a mistake left him with just £29 a month to live on.

But employment minister Alok Sharma said the new benefit is working, and claimed the rise in rent arrears is only temporary.

He said: "Universal credit is working well. After a period of time people will on average see those (rent) arrears coming down.”

The results from the 129 councils that responded to the BBC investigation showed the average amount owed by tenants claiming universal credit across the UK is £662.56. For those still on housing benefit it is £262.50

Simple Landlords Insurance has produced a guide to help landlords negotiate the Universal Credit system, which can be found here.

The guide shows what landlords and agents can do to help tenants who are on, or about to claim, the new benefit to avoid delays and rent arrears.

Universal credit, which had cross-party support when it was first proposed, brings together six benefits, such as job seekers allowance, child tax credits and housing benefit, into one payment, and is paid once a month in arrears, like a salary.

While this has worked for people, other claimants have said it is this delay in the payment, combined with confusion over the online application process, that has seen families left with no income for weeks, forced to turn to food banks and choose between paying bills or paying their rent.

Currently one million people across the UK claim the new benefit, a figure that will eventually rise to eight million.

Last month, research by the Residential Landlords Association (RLA) has revealed that almost two-thirds of private landlords with tenants receiving Universal Credit have experienced them going into rent arrears.

Based on responses from more than 2,200 landlords, the RLA’s research exchange, PEARL, found that 61 per cent of landlords with tenants on Universal Credit have seen them go into rent arrears.

This is up from 27 per cent in 2016.

The research also found that on average Universal Credit tenants in rent arrears owed almost £2,400, a 49 per cent increase compared to last year.

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