Universal Credit - Is it so bad?

Whilst we are pleased that Portsmouth was not in the vanguard of Universal Credit (UC) and Portsmouth and Cosham are now scheduled for 'ful service' from September 2018 and Gosport and Havant for November 2018,  if you can see past the implementation problems it does have benefits..... (& thanks to Mark Sage at PCC for some of this information).

For example, for landlords who have been used to working with HB, one positive aspect of UC is that there won't be breaks in the claim that often happened under HB, when people moved in and out of work, and didn't always get their HB claims in on time. Also, it appears that those for whom direct payment is already in place will not need to be re-justified when they transition to UC.

The other improvement for landlords is a simple mechanism to recover rent arrears direct from benefits, which landlords can request at the same time as they apply for direct payments. (Not many landlords are currently recovering rent arrears from income benefit payments. But this is only available for arrears in a current tenancy, not a previous tenancy.) And rent arrears are recovered at quite a high rate, which helps to reduce arrears much more quickly, although that obviously impacts on the tenant's living costs budget.

A comment from a landlord in Teeside where 90% of tenants are on benefits:

"I currently have two tenants on UC. I found it quite simple to apply for direct payments to me and, although it took nearly seven weeks plus, I am now in receipt of full contractual rent every month plus on another day each month I receive a further payment towards the arrears. So the plus side is that I receive more than I would have done if my tenants had remained on HB and I had applied for Third Party Deductions. However, I do believe that it would be better for the DWP to pay UC direct to the landlord for the first payment, at least, without having to apply for it. Once the claimant gets their first payment from UC they are already more than eight weeks in arrears. It is going to take them a long time to catch up and clear the arrears when UC is paid in arrears and Tenancy Agreements require contractual rent in advance.

My comments on the downside are the implementation of the system. There has already been loads of bad criticism of UC but, mine is that I understand that the claimants actually miss one whole week of benefits during the transition period. They are paid in arrears and have to wait a minimum of five weeks for the processing. During this time, they are left penniless!. They are then forced to beg, steal or borrow to keep going. As soon as they receive their first UC payment it is swallowed up by repaying these debts and the vicious cycle continues again. Obviously the landlord is the last one on the repayment schedule. If either of my tenants had gone into work from full HB they would have been given a four week run on of HB to cover the period between ending their benefits and waiting until the end of the month for their first wage packet. Basically being in receipt of twice the income for four weeks. The extra four weeks from HB is not an overpayment but an entitlement. I appreciate that the government, despite paying off the DUP, is cash strapped, but surely they could allow a person to continue on their old benefit and then transfer over to UC only once the claim has been processed/approved, thus incurring no loss of benefit. I know this would incur more expensive upfront, but they should look at the bigger picture of how much this delay in paying UC is costing other bodies, e.g. depression = NHS resources being stretched, evictions, homelessness, black market trading, stealing, etc. etc. The adverse publicity has had a positive effect in deterring people from actually going to work. Work availability in the NE is often restricted to part time zero hours etc. especially for inexperience/unqualified people.

Basically UC should prove to be an excellent system having all benefits under one office will mean that people"s income will be controlled via HMRC. This will avoid stoppages and suspensions and hopefully no more under or over payments. No more confusing letters from local authorities - I have just had thirteen pages of different Notifications for one tenant in less than eight weeks."

So with the changes in the budget making it easier for claimants to get advances and removing the 7 day delay when a claimant effectively had no benefits when transitioning, we hope that by the time to comes to us late next year, the benefits will outweigh the implementation issues.