86% of UC claimants in rent arrears

What isn’t clear to me (probably because of my lazy skim-reading of the research) is whether these are structural arrears: you would expect an increase in the appearance of rent arrears purely as a result of the UC payment cycle.  The HB payment cycle is four weekly in arrears to landlords, which still falls within monthly/four-weekly tenancy cycles: once your HB is up and running, you should normally have your entitlement paid before the end of the month to which it relates.  And rent rebates of course are awarded in perfect harmony with the tenancy cycle: whenever your rent falls due, it has been reduced by HB.

But UC has a structural delay built in, meaning that the payment is always going to be received a couple of weeks after the end of the month/four weeks to which it relates.  If the stats have not been adjusted for this structural effect, it is inevitable that arrears will jump under UC.  Perhaps social landlords need to get accustomed to this and adopt a new way of defining what they mean by “arrears”.  Do the figures show that arrears have increased under UC after allowing for the different payment cycle?

Copy of the report attached now.

On the issue of why arrears are arising, it says:

The majority of respondents still report the following as factors as either frequently or very frequently contributing to higher levels of arrears among households in receipt of UC. These include factors relating to tenant behaviour, administrative problems and issues with some specific elements of UC’s design:

• the six week wait for a tenant’s first UC payment (i.e. the seven day waiting period, plus payment in arrears)
• DWP not notifying landlords promptly when a tenant goes on to UC
• tenants already being in rent arrears before going on to UC
• UC payments not being made on time and/or correctly
• tenants already having difficulty with money management before going on to UC and/or using UC to pay off other debts
• mismatches between rent due dates and UC payment dates (i.e. tenants paying rent when they receive UC, rather than when it is due)
• tenants not recognising that they have a rent liability because their rent was previously covered by housing benefit
• delays in DWP processing UC applications
• tenants who require support going on to UC before they are ready (i.e. the tenant requires an APA but does not receive one until eight weeks’ arrears are accrued)
• tenants having difficulty managing variable income (and therefore variable UC payments)
• tenants not realising that their final payment from their job before leaving can be considered savings to live on for the next month
• tenants being subject to a benefits sanction

I haven’t read this report yet, but I would assume landlords would record UC rent arrears at the lowest point in the month, ie at the point they’ve made a payment which may be the date of UC payment or the claimant’s pay date. So this does take account that people will be paying in arrears but doesn’t make any allowances for the 7 waiting days or 7 day gap between MA P and payment date.