Universal Credit and How it Affects Landlords

A monthly payment to claimants, Universal Credit (UC) is delivered from the government via the local authority in which an individual resides. The amount an individual can claim for housing is, broadly speaking, the same as the Local Housing Allowance rate for the area in which they live. It’s possible to work this out on the government website by searching via the postcode or local authority in question.

It’s important for tenants (and landlords, too) to check this as not every area is equal. As you’d expect the rate is much higher in London, for instance, than it is in Hull. 

Can Universal Credit Be Paid Directly to the Landlord?

The good news for landlords is that it’s possible for the housing part of the benefit to be paid directly to them. This is achieved by the claimant (tenant) informing the council that he or she is interested in setting up an ‘alternative payment arrangement.’  

Another way money can be sent directly to the landlord is by the tenant setting up a standing order from their claim entitlement.  

If the tenant is a member of a Credit Union then it’s possible for them to open what is often referred to as a ‘jam jar’ account. With this type of account, a claimant’s money is split directly into rent, utilities and spending money. This helps them manage their money better and ensures they don’t overspend in one particular sector. For peace of mind, landlords can ask prospective tenants if they have one of these accounts already set up and then request that the tenant sets up a direct debit from it. 

Rent in Advance via Universal Credit 

It’s possible for tenants to get up to six week’s rent in advance by applying to their local authority. This isn’t, however, under their Universal Credit allowance, but rather it’s a loan from the Housing sector and it doesn’t need to be repaid. Again, this can be paid direct to the landlord at the tenant’s request.  

Claimant Commitment and Long-Term Rent

How can a landlord be reassured that a tenant claiming Universal Credit on a year’s lease, will still be receiving the benefit at the end of the year?  

This is a fair enough concern since in order to continue to receive Universal Credit, a claimant must satisfy the Job Centre that he or she is looking for work. Otherwise, the benefit can be removed – and, in which, case the landlord wouldn’t receive rent. 

The Job Centre refers to this as a ‘Claimant Commitment’ to look for work. Staff at the centre can help claimants ensure that they do indeed stick to their ‘commitment.’  

Other Ways Universal Credit Can Be Stopped

If a claimant gets a job then obviously their right to Universal Credit ends. This is also the case if child reaches adult age or the claimants has other earnings via work. 

Universal Credit and Benefit Fraud 

If a tenant is discovered to have committed benefit fraud ie they took Universal Credit but weren’t actually entitled to it, then this doesn’t mean that their landlord will have to return rental payments. The only way this would happen if the landlord themselves were involved in the fraud. 

Also, if the tenant moves out and the landlord continues to receive rent money then he or she will certainly have to repay the extra rent paid. 

Other ways a landlord may be asked to repay rent is if he or she has been paid more than the rental liability amount for a tenant (which can be checked on the government website) or if they misrepresented themselves.  

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