Problems with Universal Credit highlighted by BBC 

BBC News NI reported last week on system failures within Universal Credit that have left some local tenants in rent arrears.  We’d encourage anyone who has fallen behind on their housing payments to get advice urgently, regardless of the reasons for missed payments. 

Direct payments to landlords promised in 2012 

Five years before Universal Credit was even introduced in Northern Ireland, the NI Assembly received assurances from Westminster that Northern Ireland would enjoy certain payment flexibilities to ensure that people on the new benefit were better able to manage. One of these flexibilities was an agreement that any assistance with housing costs for renters would be paid directly to the person’s landlord, rather than into the person’s own bank account. This was intended to protect claimants from falling into arrears, while still allowing them the opportunity to opt to receive the housing costs element themselves if they so wished.  

Payments not being made to private landlords in 47% of cases 

Even though public information about Universal Credit housing costs in Northern Ireland states that payments to assist with rent will be paid directly to the landlord, it has become increasingly apparent that this is not always happening.  The BBC story focused on the issue from the perspective of social housing tenants and landlords, suggesting that this issue has forced more than 650 social tenants into arrears.   

But, this is an even greater issue for private tenants. Statistics released in August show that 47% of the 25,280 households receiving Universal Credit to help with their housing costs in the private rented sector were having payments of rent benefits made directly to them and not to the landlord. This is an increase of 4% points from the previous statistical release covering February 2020. The latest stats also show a huge increase in the numbers of people claiming UC to help with rental costs in the private sector, up from approximately 16K households in February to over 25K households in May.

Screengrab from NI Direct, accessed 18 August 2020 

Delays, system failure and claimant choice all contribute to change in default arrangements 

One computer system manages and administers Universal Credit for England, Scotland, Wales and Northern Ireland. Although the flexibilities ensuring that payments would be made directly to tenants in Northern Ireland were secured 8 years ago, a manual action is still required to override the system’s rigid, hard-coded arrangements, which ensure that payments in England and Wales go directly to the claimant.  

Issues with the above system and failure to take timely action in terms of the manual changes required are among the reasons why for 43% of private tenants their UC Housing Costs are not paid directly to their landlords. Other reasons include issues with contacting and gathering the requisite information from private landlords, as well as requests from claimants and landlords for the payment to be made directly to the claimant.    

During the 2019 Westminster Inquiry into Welfare Policy in Northern Ireland, the Department for Communities explained that they expected planned automations of UC flexibilities in NI, including automated payments to private rented sector landlords, to be implemented within the next 18 months.  In the inquiry report published in September 2019, MPs recommended that the Department for Work and Pensions work with the Department for Communities to ensure the planned automatics are in place within 18 months (i.e by February 2021). In their response to the report the DWP said they remain committed to working with DfC in respect of the planned automations.  

In addition to progressing these automations, it is important that the Department gives consideration to other barriers in ensuring payments are made directly to landlords, such as difficulties contacting individual landlords or confirming the information that has been provided. 

Notifying claimants where payment is made to them instead of landlord 

People interviewed by the BBC said that they didn’t realize that their benefits towards rent had been paid directly to them and they ended up spending this money on other essentials. Some may find it difficult to believe that a person wouldn’t realize they had an extra few hundred pound paid into their account, but Universal Credit is a very fluid benefit and it is not unusual for a person’s award to fluctuate significantly each month, particularly if they are working or have changes in their circumstances. In fact, this fluidity and the way by which it can penalise claimants has been the focus of several legal challenges. 

If the Department of Communities has had to make payment to the tenant, rather than the landlord, Universal Credit staff must notify the claimant of this anomaly. They do so by putting a note on the claimant’s online journal and the claimant’s UC statement will include a note stating that the payment of housing costs has been made to the claimant and must be passed on to the landlord. 

We are aware that some of our clients have difficulty properly engaging with their online journal and may not always fully read or understand their bi-monthly statements. It is therefore important that, as well as addressing the above-mentioned issues with the system, the Department considers how to ensure claimants affected are made fully aware that they will be receiving their housing costs directly, and therefore need to pass the payment on to their landlord. Failure to do so can leave tenants at risk of arrears and eviction as a result of misinformation and system issues beyond their control.  

Getting help if you’ve fallen behind on rent 

Housing Rights would encourage anyone who has fallen behind on rent payments to get advice urgently. You can contact us by calling 028 90245640 or using our chat service at www.housingadviceNI.org 

Landlords who require advice or information about Universal Credit can contact Landlord Advice NI.  

Housing Rights Housing Mediation Service may be able to assist tenants and landlords who have been affected by this issue.