Since the introduction of Universal Credit, there has been a substantial rise in the number of people facing repossession and eviction from social housing.

 

We attribute much of this rise to the delay and payment gap experienced by claimants when moving from legacy benefits to Universal Credit. A further cause is a trend by some housing associations to resort to the courts for reclaiming rent arrears, much earlier compared to legacy benefits. The reason behind this is unclear.

 

Claimants receiving legacy benefits traditionally had their Housing Benefit paid by the council. With Universal Credit, Housing Benefit stops and the claimant must remember to include a claim for rent (“Housing Element”) in the Universal Credit claim. Many claimants who transition from legacy benefits to Universal Credit are unaware that Housing Benefits will cease and they should claim the Housing Element. As a result, they risk falling into arrears while their situation is resolved.

 

The Department for Work & Pensions (DWP) changed the rules recently to mitigate this by allowing Housing Benefit payments to overlap Universal Credit claims by two weeks. However, given that some claimants are waiting several weeks for their first payments of Universal Credit, rent arrears can build up very rapidly.

 

Our data tells us that families, who have no savings or access to money, are already more likely to have debt problems, so any interruption in cash flow can have a catastrophic effect. Claimants may be able to get a loan, if they have access to credit, but this can be extremely expensive. Claimants may apply for an advance payment from Universal Credit, but as the DWP deduct as much as 40% from payments to recoup the advance, this also has a severe impact on household budgets. Both scenarios exacerbate any debt issues.

 

Our data tells us that even when a claimant’s has correctly claimed the Housing Element and it is paid directly to the housing association, the Housing Association is still resorting to the courts for payment of arrears.

 

In a recent client case, the DWP suspended a Housing Benefit claim from a claimant who had failed to advise them of a change of circumstances. When the claimant re-applied for it, the DWP informed them that the waiting time to resolve their claim would be 8-10 weeks and that despite this wait, there was no guarantee that their application would be successful, nor that their claim would be backdated. The DWP advised the claimant to apply for Universal Credit in the meantime. But, by claiming Universal Credit, the claimant was subject to its’ mandatory waiting time and payment gap and importantly, they could not now revert to the Housing Benefit application. Their re-application for Housing Benefit was not successful, which left them with several weeks rent arrears. Our client’s landlord, a housing association, took them to court where a possession order was granted, adding £120 to the client’s debt. The court then granted a warrant of eviction, adding a further £325 to the client’s debt.

 

Our Housing Caseworker tried to get a Discretionary Housing Payment for the claimant, but they did not qualify because they did not receive Housing Benefit.

 

The only course of action was for our Housing Caseworker to advise our client to go to the court to ask for an adjournment in the first place. Then, for the client to go back to the court and ask for a suspension of the warrant on terms, which meant that as long as the client paid their rent and an agreed amount of arrears, the warrant would remain suspended.

 

Because of an honest oversight by our client in not reporting a change of circumstances, our client was unable to avoid accruing many week’s rent arrears, This culminated in the client being pursued for the debt in the courts and facing eviction. Fortunately, our client was able to get the warrant suspended. However in other similar cases, whole families have been evicted .