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Housing associations urge benefit claimants to pay extra rent in advance Housing associations urge benefit claimants to pay extra rent in advance
(7 months later)
People on benefits are being told by housing associations to make extra rent payments in advance from now on, to avoid ending up in financial difficulties and then in court once they are transferred to the new system of universal credit, the Observer has learned.People on benefits are being told by housing associations to make extra rent payments in advance from now on, to avoid ending up in financial difficulties and then in court once they are transferred to the new system of universal credit, the Observer has learned.
The instructions to people on housing benefit, which are causing alarm among tenants and charities, reflect concern among housing providers that people will default on payments when they have to pay rent themselves, a month in advance, under the new system. At present most rent payments for people on housing benefit are sent direct to landlords. But when universal credit is introduced nationally between now and 2017, tenants will receive one lump sum covering all their benefits and be expected to meet their housing costs themselves, a month in advance.The instructions to people on housing benefit, which are causing alarm among tenants and charities, reflect concern among housing providers that people will default on payments when they have to pay rent themselves, a month in advance, under the new system. At present most rent payments for people on housing benefit are sent direct to landlords. But when universal credit is introduced nationally between now and 2017, tenants will receive one lump sum covering all their benefits and be expected to meet their housing costs themselves, a month in advance.
The Town and Country housing association, which provides 9,000 affordable homes in 22 local authority areas in Kent, Sussex, Surrey and south London, has told its tenants who receive housing benefit to hand over £14.60 extra a month until they are a month in credit, so they can meet the first rent payment once they are on universal credit. If they do not, their tenancies could be in doubt. "This will ensure that when you transfer to universal credit you will not be in arrears which could put your tenancy at risk," the association has said in local newsletters.The Town and Country housing association, which provides 9,000 affordable homes in 22 local authority areas in Kent, Sussex, Surrey and south London, has told its tenants who receive housing benefit to hand over £14.60 extra a month until they are a month in credit, so they can meet the first rent payment once they are on universal credit. If they do not, their tenancies could be in doubt. "This will ensure that when you transfer to universal credit you will not be in arrears which could put your tenancy at risk," the association has said in local newsletters.
In one case reported to the Observer, a tenant who was owed £362, after having paid the "bedroom tax" by mistake, was told by Town and Country that the money would not be reimbursed as it was in her "best interests" for it to "remain on your account" pending the introduction of universal credit, at an unknown future date.In one case reported to the Observer, a tenant who was owed £362, after having paid the "bedroom tax" by mistake, was told by Town and Country that the money would not be reimbursed as it was in her "best interests" for it to "remain on your account" pending the introduction of universal credit, at an unknown future date.
Six Town Housing, which is based in Bury, Lancashire, tells tenants on its website that because universal credit will be paid four weeks in arrears "you need to make additional rent payments now if you are affected by the introduction of universal credit. Otherwise, you are at risk of your rent account falling into rent arrears.".Six Town Housing, which is based in Bury, Lancashire, tells tenants on its website that because universal credit will be paid four weeks in arrears "you need to make additional rent payments now if you are affected by the introduction of universal credit. Otherwise, you are at risk of your rent account falling into rent arrears.".
Gillian Guy, Citizens Advice's chief executive, said: "It's for householders to manage their finances, not landlords or housing associations. There's a difference between advising people to be financially prepared and doing it for them, and it would be concerning if the latter were the case."Gillian Guy, Citizens Advice's chief executive, said: "It's for householders to manage their finances, not landlords or housing associations. There's a difference between advising people to be financially prepared and doing it for them, and it would be concerning if the latter were the case."
A spokesman for Town and Country said it understood that it would "be difficult for anyone who is likely to be on full housing benefit, in which case we ask for the minimum of £14.60 per month. This will ensure that their rent account is in credit".A spokesman for Town and Country said it understood that it would "be difficult for anyone who is likely to be on full housing benefit, in which case we ask for the minimum of £14.60 per month. This will ensure that their rent account is in credit".
"Similarly, it will also help to ease the transition when universal credit is introduced and residents will be responsible for paying their own rent from the credit they receive.""Similarly, it will also help to ease the transition when universal credit is introduced and residents will be responsible for paying their own rent from the credit they receive."
In respect of the tenant who was told she would not be reimbursed for wrong payment of "bedroom tax", it said it would write to her to see if an acceptable arrangement could be reached.In respect of the tenant who was told she would not be reimbursed for wrong payment of "bedroom tax", it said it would write to her to see if an acceptable arrangement could be reached.
The Department for Work and Pensions says it has put in place arrangements to ensure that people who struggle with the new system can have all the advice they need. It also says those who want, or need to continue having their rent paid directly to their landlords can continue to do so.The implementation of universal credit, which has been dogged by costly IT failings, is way behind schedule. Only around 12,000 are currently on the new benefit. Until this month the only cases were new claimants who are single people, living at home and without children – the simplest cases to deal with. The Department for Work and Pensions says it has put in place arrangements to ensure that people who struggle with the new system can have all the advice they need. It also says those who want, or need to continue having their rent paid directly to their landlords can continue to do so.The implementation of universal credit, which has been dogged by costly IT failings, is way behind schedule. Only around 12,000 are currently on the new benefit. Until this month the only cases were new claimants who are single people, living at home and without children – the simplest cases to deal with.