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The Chartered Institute of Housing is the independent voice for housing and the home of professional standards

Universal credit: 4 top tips for housing providers

25/01/2016


The roll-out of universal credit (UC) has been very gradual but from April job centres in every part of the country will be processing claims. It's time for social landlords to prepare for a major change, says CIH policy and practice officer David Pipe. So what do we need to know?

Image of money in jars1) Many organisations will need to change the way they collect rent

Landlords’ initial experiences of UC suggest that rent collection rates are significantly lower than ‘normal’, although these have improved over time and as UC rolls out to more claimants. In response, you need to think about your approach to rent collection. Many organisations are now seeking to ingrain a ‘rent first’ message, to make sure all tenants understand that they have a responsibility to pay the rent, and that rent is not seen as last in the queue behind council tax, utilities and other bills.

In practical terms, some organisations are adopting a lower tolerance of arrears and are escalating cases more quickly. Many are also looking at increasing the take-up of direct debits. This sends a clear message about the importance of paying rent, although some tenants are reluctant to sign up due to worries about the unreliability of UC payments. With UC being paid to different claimants at different points in the month, it’s also essential to offer a wider range of direct debit payment dates than might have been needed in the past.

2) Pre-tenancy work is becoming increasingly important

A number of organisations are now putting more emphasis on making sure they aren’t ‘setting people up to fail’. As such, affordability assessments - aimed at ensuring that an applicant will be able to financially sustain a tenancy - are becoming an increasingly common part of the letting process. These usually generate referrals to relevant support services, while some organisations also say that they will refuse to allocate if an assessment confirms that a tenancy would not be sustainable, even with support.

An increasing number of organisations have also begun routinely asking for rent in advance from new tenants - although some flexibility is required for those who cannot provide, for example, a full month’s rent in advance. Landlords who have already introduced this report having fewer issues than they had anticipated, with requests generally being accepted by prospective tenants.

3) Tenants are most likely to need to support at the start of a UC claim

Landlords know how valuable money advice/financial inclusion services can be, but there is a concern that due to financial constraints these services could be facing cuts just as UC is being rolled out more widely. Landlords will need to consider their resources and how best to target them. In doing so, you should bear in mind that new claimants routinely face a long wait (around six weeks) for their first payment and that this means that the beginning of a new claim is the period when rent arrears are most likely to accrue.

Other groups of claimants who are particularly likely to need support include those who are subject to a benefits sanction and those who have variable incomes (and therefore receive different amounts of UC from one month to the next).

4) Building a positive relationship with your local Jobcentre Plus (JCP) can help

The Department for Work and Pensions' (DWP) processes for administering UC are still developing and many landlords have reported problems with, for example, not receiving notifications when their tenants first go on to UC and the housing element of tenants’ payments not being calculated correctly, or being left out entirely.

Joint working between social landlords and JCPs can help to alleviate some of these problems. For example, some JCPs will now routinely contact the landlord as part of their process for handling a new claim, to notify them and also to confirm the correct rent amount. However landlords’ experiences of working with JCPs differ greatly from one geographical area to another and these relationships need to be developed at a local level.

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