Universal Credit update – 2019 rent changes process and update on the 53 week rent year

The Federation has been working on behalf of members to make Universal Credit a system that works for landlords, tenants and residents. Over the last few months we've made good progress. We’ve already seen some positive changes to the system, such as the two-week run-on of Housing Benefit and a reduction to the six-week wait, but there’s still a way to go before Universal Credit can work for all those that need it.

1. 2019 rent changes process

In a change to previous years, DWP will accept notifications of rent changes from social landlords from this April. DWP announced today that from mid-April 2019 it will make a downloadable file available to all of tenants where the rent has been verified via the Landlord Portal. Landlords will need to use this file to update the housing costs for each tenant listed and once the file is populated, it can then be uploaded to the Landlord Portal. Any required adjustments to housing costs will be made to the tenant’s payment. People will be notified of this via their Universal Credit Journal.

This change only affects social landlords who are registered on the Landlord portal. Full details of the rent change and a landlord FAQ are available, which includes information on the system for social landlords who do not have access to the Landlord Portal.

2. 53 week rent year update

Following work from the Federation and our members, DWP has acknowledged that there is an issue with the calculation of monthly rent in the Universal Credit system. The conversion is done currently by multiplying the weekly rent by 52 and then dividing by 12. This effectively means that one day’s rent a year (two days in a leap year) are not covered by Universal Credit allowance.

DWP recently said ‘we are currently considering whether this formulation around weekly rents, and potentially other weekly amounts in the Universal Credit calculation, should be amended.’

The Government is yet to commit to making any change and it will take some time both for the legislation to pass and for DWP to implement changes to the system. It is currently very difficult for housing associations to mitigate the impact of this shortfall in benefit for tenants. If the landlord decides not to charge one week of rent, Universal Credit calculations deduct the rent free weeks from 52, leaving tenants with less money.

We urgently need a change in the legislation and we will continue pressing Ministers and MPs on this issue.

3. What's next for managed migration?

The next stage of Universal Credit rollout is the managed migration of claims from the legacy system.

Neil Couling, Director General of Universal Credit at DWP, has written to the Federation setting out the plans to test the process with a pilot phase in a small area from July 2019. They will transfer ‘up to 10,000’ claims over this first phase.

DWP have expressed a strong commitment to working with social landlords as partners, to ensure people can make the claims and do not miss out on any entitlement to benefits. This test phase will include looking at:

• design challenges
• exploring using information held by DWP, for example a current Work Capability Assessment
• working with partner organisations including social landlords on a ‘Who Knows You’ model. This will ensure that DWP reaches individuals in the most effective and supportive way.

4. Mixed age couples and Universal Credit

From 15 May 2019, mixed age couples (where one party of the couple is over Pension Credit qualifying age and the other under that age) will no longer be able to choose whether they claim Universal Credit, Pension Credit or pension age Housing Benefit.

Both parties of a couple will have to reach the Pension Credit qualifying age before they can be entitled to Pension Credit and/or pension age Housing Benefit. This will not affect existing couples on Pension Credit, but it will impact people who form a new couple or where the person above Pension Credit age moves in and then out of work.

Age UK have stated that many people will be significantly worse off claiming Universal Credit compared to an equivalent claim for Pension Credit. The ‘bedroom tax’ restrictions on help with housing costs will apply.     

Here is a sample of the letters being sent to people by DWP. It is important that any mixed age couples entitled to Pension Credit who are currently not claiming make a claim before 15 May 2019 before the new rules apply so they do not miss out.

6. Our work with the DWP Select Committee

The Federation submitted evidence to the DWP Select Committee enquiry into the ‘natural migration’ of people from the legacy benefit system onto Universal Credit. We recommended that the run-on of benefits should be brought forward from 2020. We also raised the need for better information and advice, suggesting the potential to use the Landlord Portal to facilitate better data sharing between social landlords and DWP.

7. The Federation’s Universal Credit survey results

Our Universal Credit survey for housing associations gives us the evidence to press for changes in both the administration and the policies of Universal Credit. Here are the key findings from the last quarter:

• Rent arrears are higher for people in receipt of Universal Credit.
• The third party payment system for Alternative Payment Arrangements in full service areas is causing significant problems. DWP has set out a commitment to redesign the system, creating a monthly payment system. We will continue to press the urgency of making this change.
• Satisfaction with the Landlord Portal remains high, with 66% of respondents satisfied. DWP estimates that the Portal now covers 95% of social housing tenancies.
• There is increased satisfaction with advance payments, which coincides with major changes to the system that include greater flexibility and increased publicity from the Government around the availability of advances.
• Dissatisfaction with the Universal Credit helpline and available advice are concerning. We will continue to press for improvements, including effective working between Citizen’s Advice and social landlords from April 2019 with the launch of the new Citizen’s Advice Help to Claim service.