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Court order for rent arrears and UC
At the moment most judges award landlords rent plus £3.70 has a normal court judgement.
If the landlord asks the DWP to take this direct from a UC claimant they take a higher figure.
If the claimant objects to the amount being taking by the DWP, they always come back with the set % answer.
I feel it’s a bit unfair on the claimant especially after they have agreed a figure with a county court judge.
Anyone got any ideas how claimant stands legally.
This has been discussed here - http://www.rightsnet.org.uk/forums/viewthread/8168/
- but I can’t see any firm conclusion.
I would argue that a County Court judge will be ordering a repayment which s/he judges, in the light of all circumstances, to be reasonable for both the claimant and the landlord, and that this is fairer and more thought-out than the standardised approach of DWP.
DWP guidance says that the deduction should protect the interests of the claimant – and this surely must include thinking about whether the deduction is too large and would cause other financial problems(?)
i’m at a loss to understand how DWP guidance on percentages can override a court order. Court has ordered X, not Y, and it’s not for DWP to say different. What are the DWP doing with the amount over and above what Court ordered?
Well, they are paying it to the landlord. The issue here is that the UC claims and and payments regs give DWP sweeping discretion to divert some or all of the claimant’s UC to a third party with no guiding framework in the Regs and no right of appeal. DWP would probably say that it is open to them to use that discretionary power to pay a bit more off the arrears than the court has ordered, although the suspicion is that what we are seeing here is the opposite of discretion in that their procedure is robotic and they are not geared up to vary the max percentage on a case by case basis.
I don’t know what the claimant can do about it - maybe ask the landlord to forward some of the money on to the claimant but that would come up against two obstacles: landlord’s rent account systems not set up to do that and probably the landlord wouldn’t want to anyway.
UC are sending the landlord the amount of arrears they are deducting from the claimant, and they will not budge on this amount.
I have found this, which refers to the SSAC consultation (which i cannot recall at all) in 2014 which started with a proposed 40% rent arrears deduction (!) and which presumably resulted in the current 10-20% business:
It makes reference to DWP making a ‘Financial Hardship decision if the claimant or a third party such as a representative from the Advice Sector or a Social Landlord, contacted us to say the claimant was struggling because of the amount deducted.’
Not sure what this ‘Financial Hardship decision’ is as such (still looking) but could this be a possible way forward? There are plenty of scenarios in which the rent arrears recovery rate will unbalance the claimant’s finances completely and will worsen rather than improve the situation. The interests of the claimant and of other priority creditors are scarcely served by excessive deductions.
Dont Know how I feel about this….Will probably put in the file….marked “interesting but not sure.”
If you are redefending (to prevent homelessness) on a N244… and the client is ahead of where they were suppossed to be….but say has missed the last couple of payments say due to income shock…...being ahead might be helpful…...
I would say both being behind and missing isnt generally helpful…... Still having said that its still going to be dependent on who the judge is…. and ammount of times you have gone back… the total arrears…and so on. The most important thing is to attend…....
Of course if your client doesnt miss when on a suspended order there is no problem…. if they do miss ie…..If they don’t stick to the agreement, their landlord can apply direct to the court for a warrant of possession to evict them. However, unlike with a postponed possession order, your client most probably WONT be told in advance when their landlord does this.
Once the landlord gets the warrant of possession, your client can be forced to leave their home so will need a N244.
Dont know…..
This is a topic which we have all been giving some thought to over here at Shelter given that many of my colleagues are dealing with possession cases.
The SPO requires the tenant to pay the arrears at a certain rate. It doesn’t require or permit the DWP to do anything at all.. Nor does it prevent the landlord from asking for recovery at a higher rate. So when the DWP receive a request for deductions, it’s effectively indifferent to what the court has ordered the tenant to pay, it is concerned simply with exercising its power under para 7 of schedule 6 of the C&P regs - which essentially only requires that arrears exist.
Those regs give the DWP 3 options; (1) don’t recover at all, (2) recover at 10% or (3) recover at more than 10% but no more than 20%. Those are the only options - it can’t recover at less than 10% simply because thats what the court ordered the tenant to pay. This isn’t guidance - its the regulations.
The tenant is still perfectly entitled to meet the terms of the SPO without DWP involvement if he can persuade them not to deduct. I suppose the main ways you could try to do that are (a) making representations to the DWP (b) working for three months and removing the power to deduct (c) judicial review of the decision to recover or (d) persuading the court, on making the SPO, to order the landlord not to apply for deductions. The risk of course is that the tenant might not be able to comply with the order without deductions being made so that would need to be weighed up.
N.B. I am looking at the version of the C&P regs listed as the most recent revised edition on legislation.gov.uk. They’re inaccurate as they still list the deduction for rent arrears as fixed at 5%. The regs were amended by The Universal Credit and Miscellaneous Amendments (No.2) Regulations 2014 and should now read as setting a range of 10-20%.
My Local Authority is asking DWP to reduce the amount deducted if they try to take the 20% or they ask just for the Housing Costs and nothing to arrears and ask the tenant to pay their £3.70 per week.
Not sure other landlords are as accommodating.
I suspect most social landlords are going to review thier rent collection at the point of UC full service.
The recent housemark welfare impact reform report gave the following headline.
https://www.housemark.co.uk/media/1735/wrireport2016.pdf
“The headline finding of the survey is that the average rent arrears debt of a UC claimant is £618, this compares to average non-UC arrears of £131 per property. With average social rents around £96 per week, this UC debt equates to 6-7 weeks’ rent. It seems that this risk of rising arrears is an issue that landlords should be preparing for.”
These are bench mark results…. once you multiplty this over UC Claimants in your total general needs stock…...
I have had this scenario, client referred to solicitor for help with possession proceedings and sols suggested making an offer to court but without realising that UC was already taking a huge chunk of benefit for arrears. solution, point out to the court that arrears are already being cleared by deductions form UC and if the deductions start after the court order go back to court and vary the order to state that while deductions are being met from UC no further action by court would be taken, does this sound like a runner ??
I have had this scenario, client referred to solicitor for help with possession proceedings and sols suggested making an offer to court but without realising that UC was already taking a huge chunk of benefit for arrears. solution, point out to the court that arrears are already being cleared by deductions form UC and if the deductions start after the court order go back to court and vary the order to state that while deductions are being met from UC no further action by court would be taken, does this sound like a runner ??
Not really. If the court orders the claimant to pay £X per month and the deductions are already running at £X + Y per month then the tenant doesn’t have to do anything to satisfy the court order. The order is to pay the money and the deductions would simply be providing the mechanism by which it is paid.
I think Elliot’s earlier point concerning the terms of the UC regs is central. The language of the basic clams and payments regs is usually along the lines of ‘must not exceed’ a certain percentage, in principle allowing a degree of flexibility. However the UC and Misc Amendment Reg No 2 (SI 2888) in relation to rent says ‘no less than 10% and no more than 20%’. The latter is a discretion free zone, unless the DWP agrees to recover nothing at all.
Where all this fits in the context of the new benefit cap levels is probably better not to think about too much.
The other points to consider are that you might see landlords starting to argue in court for rent plus 20%/10% figure, rather than rent plus £3.70 because they know this is what they can get from UC. I am aware of a case where a social landlord successfully persuaded the court to use the UC figure in the order.
Whereas the in example Martin gives above, someone has a low court order, but actually higher deductions which cushions them a bit meaning they are ‘ahead’ if any interruptions to UC.
On the other hand social landlords being v sympathetic and allowing tenants to pay £16pcm by agreement.
Also the regs allow total deductions of 40% (and above in some cases), so people could have council tax, water, fines coming out as well ...
All of this is telling me that the modern advice worker, needs to have a very good inter-disciplinary knowledge of benefits and housing law/homelessness ...or a rightsnet subscription….. (Hey…Do you see what I did there Admin?)