Welfare Reform Update

On the 5th February 2013 the Government responded to a report by the Work and Pensions committee on Universal credit. The Government has issued a command paper; “Universal Credit implementation; meeting the needs of vulnerable Claimants.”

The following points are highlighted from the paper:

  • Direct payment of universal credit to landlords; where Claimants fall into rent arrears or are deemed ‘vulnerable’, their benefit payments will be paid direct to the landlord. Further guidance is to be provided as to the ‘trigger’ point for when payments are to be made directly to the landlord in the case of rent arrears.  The Welfare reform Act does not define the ‘vulnerability factor’ for the purposes of switching housing benefit payment direct to the landlord instead of the tenant. In the absence of any specific definition, it appears that landlords will have to discuss each and every tenant they believe to be ‘vulnerable’ with the Department of Work and Pensions (DWP) who in turn will be provide case handlers  with ‘full guidance’.
  • Housing Associations will be able to make a case for additional budgeting support for specific tenants where tenants are identified as being families who need this support prior to the introduction of Universal Credit.
  • Direct Payment Demonstration Projects; The first results of a direct payment demonstration scheme for social housing tenants running in six areas across Great Britain have been described as “encouraging” by the DWP, despite arrears of 8% being recorded in first four months, around double the average for arrears. However, Lord Freud said the majority of people are paying their rent in full and on time. The projects are testing different ‘trigger’ points for switching payment back to the landlord if tenants get into difficulty.
  • The Department of Work and Pensions has confirmed that the benefit cap which is due to be introduced nationally in April 2013, will initially only be introduced in four London boroughs as follows; Bromley, Croydon, Enfield and Haringey. These four local authorities will be the first to apply the cap in April 2013, it will then be rolled out nationally over the summer
  • The DWP has said that it may review its refusal to exempt temporary accommodation from the benefit cap, once a review has been completed in 2014

For the full paper:



If you require further information please contact Aisha Akhtar, Solicitor in the Social Housing team on 020 8799 1884