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Universal Credit Issues Raised At PDPLA Meeting

Universal Credit Issues Raised At PDPLA Meeting

At our June members meeting Gary Jenkins from the Department for Work and Pensions and Mark Sage, the Tackling Poverty Officer at Portsmouth City Council updated attendees on the current status and plans for Universal Credit and gave guidance on how best to handle the rollout locally, what support was available, what landlords should take care with, etc.

After the meeting, Mark produced comprehensive guidance for landlords which we have appended below in full...

Universal Credit Full Service issues raised at the PDPLA meeting in June 2018

Alternative payment arrangement (APA)

There are three types of APA, and the DWP can agree as many as are needed in the tenant's individual circumstances:

  1. Managed payment to landlord (see below)
  2. Twice monthly payments
  3. Payment split between each person in a couple (for most couple claims, just one person will receive the full joint UC entitlement)

There is a list of vulnerability factors that the DWP will take into account (if they are made aware of the tenant's needs) to decide whether an APA is required (see tables at the end of this article or here in the PDPLA Member Area for a better formatted version of the same).

Managed payment to landlord (MPTL)

As with Local Housing Allowance, housing costs in UC will not be paid to the landlord just because the tenant or landlord request it; there have to be reasons for it to be paid to the landlord, and the DWP have to be satisfied that it is in the best interests of the claimant or their household.  These may be relevant:

  • If the tenant was receiving Housing Benefit at the time they claimed UC, and it was being paid direct to the landlord, the tenant is then given the choice of having their UC housing costs paid direct to their landlord. PCC's policy on when LHA can be paid direct to the landlord can be found here:  https://www.portsmouth.gov.uk/ext/documents-external/ben-local-housing-allowance-safeguarding-policy.pdf
  • If the tenant is in 2 months' rent arrears. The rent is treated as being in arrears whenever it is due to be paid, so if the rent is due in advance on the 1st of the month, by the 2nd of the month if it has not been paid, the tenant is considered to be 1 month in arrears.
  • If the tenant is 'vulnerable'. DWP will consider the list of tier 1 and tier 2 vulnerability factors - see APA criteria matrix above.
  • Landlords will be able to request a MPTL using this online form (UC47): https://directpayment.universal-credit.service.gov.uk/
  • If you wish to request a MPTL due to vulnerability, you must use the secure version of UC47, and send it by post or secure email. For a copy of this form, use the above link, and when you are asked 'Does your email contain any of the following? (.gsi .gsx etc)', choose 'yes' (even if it doesn't).

When a private rented sector landlord receives a MPTL, it will be paid on the same day of every month.  This is the tenant's monthly payment date, which is one month and one week from the date they submit their claim. 

The maximum amount will be the 'housing costs element', which is the lower of the full rent (including service charges) or the LHA rate for the size of household, minus any non-dependant deductions ('housing costs contributions' in UC). 

If the tenant's total UC entitlement falls below the housing costs element in any monthly assessment period (for example because their earnings increase, or they are sanctioned), the landlord will receive the tenant's full UC entitlement, minus any third party deductions. 

So where there is a MPTL: first, any third party deductions are paid; second, the landlord is paid; third, the tenant receives any remaining entitlement.

Rent arrears deductions

Landlords can request that an amount for rent arrears is paid direct to them from the tenant's UC entitlement.  This only applies to current tenancies, not former tenancy arrears.

Deductions for rent arrears are made from the tenant's UC entitlement before they receive their payment, but they are not paid to the landlord with the MPTL (if one is in place).  Rent arrears and other third party deductions are paid on a 4 weekly payment cycle, so will be paid on the next cycle after the tenant's payment date, which could be up to 27 days later.  There are 13 x 4 weekly payment cycles in a year, but the landlord will receive 12 payments, from the tenant's monthly entitlement, so there will be one 4 weekly payment run a year where no payment will be received for rent arrears.  

Housing Benefit 2 week run-on

This was introduced in the autumn budget, and is 2 weeks additional full HB, paid to anyone whose HB ends due to making a claim for UC.

So if a tenant is moving and intending to claim UC, they should not cancel their HB claim because they are changing address, they should claim UC, which will cause their HB claim to be cancelled.

The 2 week run-on will be paid in the same way as the previous HB, ie to tenant or landlord, unless the tenant has moved address in which case it will always be paid to the tenant.

Monthly assessment period and housing costs

A tenant's UC housing costs element is assessed based on the situation on the last day of their monthly assessment period.  This means that if they take on a tenancy the day before their assessment period ends, they will receive a housing costs element for the whole month. 

But if their tenancy ends the day before their assessment period ends, they will receive no housing costs element for that month. 

When a tenant moves from one tenancy to another, their housing costs element will be based on the tenancy they are in on the last day of their monthly assessment period.  If there is a Managed Payment to Landlord, the payment for the entire month will go to the landlord as of the last day of the monthly assessment period.

Notifications to landlords

Private sector landlords are not notified when a tenant claims UC, but if you are receiving HB payments direct, you will be notified by HB when these end.

If you receive an MPTL, you will not be notified of the amount you will receive, so you will need to check payments received on your tenant's monthly payment date each month.

If you want to contact UC on behalf of your tenant, you must have their explicit consent.  If you are able to ring the UC service centre while you are with the tenant, they will be able to give consent verbally.  Alternatively, they can add a note to their online journal; this should include the name of the person they give consent to speak to UC, their relationship to the tenant, what information they want to be disclosed, and why the information is needed.

Discretionary Housing Payments

These will continue to be provided by PCC's Housing Benefit team for tenants in Portsmouth.  The maximum amount of DHP that can be awarded is the full housing costs element, but as now, tenants will need to show good cause for requiring an additional payment, and in most cases they will only be made for a short period of time, while other solutions are pursued, such as seeking additional income, or moving to a cheaper home.

Information resources

Information for landlords - https://www.gov.uk/government/publications/universal-credit-and-rented-housing--2/universal-credit-and-rented-housing-guide-for-landlords

Roll out timetable - https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/693928/universal-credit-transition-rollout-schedule.pdf

Mark Sage, PCC Tackling Poverty Coordinator, June 2018

The vulnerability factors that the DWP take into account  to decide whether an APA is required follow:

Written & oral information and advice from the Portsmouth & District Private Landlord's Association is given in good faith, but no responsibility whatsoever is accepted by the Association or it's officers for the accuracy of it's information & advice nor shall the Association be held responsible for the consequences of reliance upon such information.

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