A controversial system that automatically approves landlord requests to deduct tenants’ benefits to pay rent arrears and ongoing rent payments is being re-examined, Work and Pensions Secretary Liz Kendall announced today [Tuesday 25 February]
It comes amid concerns that the system – aimed at helping people avoid issues with their landlords such as eviction - may actually be pushing the poorest into debt.
Currently, a computer program automatically approves landlord requests to deduct up to a fifth of someone’s monthly Universal Credit payments for outstanding rent repayments without them being consulted by either their landlord or DWP.
The department will now look at this process and consider better ways of ensuring landlords get the rent they are owed in a fair and proportionate way while benefit claimants are protected from falling into debt.
It comes as part of wider efforts by the Work and Pensions Secretary to fix the broken welfare system to make it fairer and ensure it improves living standards which will unlock economic growth – a key commitment in the government’s Plan for Change.
Work and Pensions Secretary, Rt Hon Liz Kendall MP, said:
This decision comes in response to a high-profile legal challenge in January, which was won by Nathan Roberts whose benefits were deducted and automatically paid to his landlord to cover alleged rent arrears and ongoing rent payments - despite a dispute about repairs to the property. The Work and Pensions Secretary has confirmed DWP will not appeal this decision.
Minister for Social Security and Disability, Rt Hon Sir Stephen Timms MP, said:
This comes ahead of a manifesto commitment to deliver a wider review of Universal Credit to ensure it is getting people into work, making work pay and tackling poverty.
In April, the Universal Credit Fair Repayment Rate will also come into force, reducing the cap on how much can be deducted from someone’s benefits from 25% to 15%. This means approximately 1.2 million households will keep more of their Universal Credit payment each month, with households expected to be better off by £420 a year on average.