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Too complicated and confusing to account for 53 week rent years in UC awards
So a couple of other points about this:-
1. I wonder if this is why we have to wait at least eight weeks before we get our first APA payment on new UC claims (e.g. one of my clients claimed UC 08/08/2018, and we got our first payment 12/10/2018)? Are they introducing the missed payment at the start, and then playing catch up? This would help them to avoid overpayments when a claim ends towards the end of the 12/13 cycle, so I’d grudgingly admit it makes some sense (but only in as much as it makes sense to take weekly payments, convert them to nearly monthly, then pay them four weekly for some of the year).‘IF’ payments are made correctly, then you shouldn’t have to wait 8 weeks on all new claims - in the example you have given above then you would have to, however if the client’s UC claim date had been 05/09/18, then their Housing Element would also be due to be paid to you on 12/10/18, as this would still be the 1st landlord payday after the claimant’s payday.
Unfortunately still doesn’t help with the weekly/monthly shortfall issue.
Highly simplified and focusing on Landlord UC - APA where claimant’s assessment period is 6th to 5th:
If you request APA on 19th Feb DWP takes 2 weeks to make a decision (5 March). First APA is paid 4 weeks after this (2 April) and every 4 weeks from that date.
Easiest is to ask UC which assessment period the payment relates to and completely ignore the month it’s actually paid in.
Most landlords are overestimating arrears level because of this.
Highly simplified and focusing on Landlord UC - APA where claimant’s assessment period is 6th to 5th:
If you request APA on 19th Feb DWP takes 2 weeks to make a decision (5 March). First APA is paid 4 weeks after this (2 April) and every 4 weeks from that date.
Easiest is to ask UC which assessment period the payment relates to and completely ignore the month it’s actually paid in.
Most landlords are overestimating arrears level because of this.
I think this is wrong. The first APA is not paid four weeks after the decision is made - Flair’s explanation seems correct - it is the first landlord payment date after the claimant’s payment date. We receive all of the APA payments in one go every four weeks. Any new APA falls into that schedule, and this often means we don’t receive anything for two months or more. The DWP often tells tenants that they have paid the rent weeks before we actually receive anything.
Asking which AP every payment relates to is not easy - I understand it would be a manual operation - either calling or emailing the DWP and going through every single claim.
And it’s not that landlords are overestimating rent arrears levels - it’s that rent arrears levels are actually increasing. Rent arrears are rent due minus payments received. If you know a payment is pending and guaranteed then you can take this into account - I’ve seen plenty of social landlords do this for HB in court submissions. But the arrears still exist until the payment is received. If somebody is a month late paying their rent then they are going into arrears, if they always pay on time then they are not going into arrears. This is reflected in the grounds for rent possession for assured tenancies - persistent late payment is a ground for possession even if the account is not in arrears when it gets to court.
But I fully agree that there has been increased confusion because of all this. I recently helped a client who was taken back to court by his landlord because he’d missed a payment - in fact it was the 13th four weekly APA date, so they’d already had the 12th monthly payment. The judge wasn’t impressed and ordered them to pay my client’s train fare. Can anybody explain the rationale behind four weekly monthly payments?
Different councils appear to be doing things differently (not surprising - the UC letters across boroughs are also different)
The LA I work in operates on the 2week-4 week; 4week thereafter schedule. UC informs the landlord the corresponding assessment period when they make the payment. Not sure if this is upon request but rent officers across at least 3 of the HA are aware of this.
Because of the 4week delay, there is usually a discrepancy of ~£500 between what what UC statement claims to have paid and what the landlord calculates as owed (especially if the housing mgmt system prioritises cases based on arrears). Anytime local HA suspect this, they send us the rent statement (all GDPR compliant!) and we check it against client’s UC award and inform CM*.
CM reviews this discrepancy and the landlord then needs to call a magic number to release the payment.
Very annoying, these APAs… False sense of security.
(Not sure why 4 week payments though)
*CM Because it’s quicker for us as we’re based at JCP. Otherwise, the full service phone line might help?
Baroness Buscombe has clarified -
No year contains 53 weeks. This perceived issue arises where a landlord charges rent weekly on a Monday and, because of the way the calendar falls every 5 or 6 years, seeks 53 rent payments in a year, with the 53rd payment in part covering the tenancy for the first few days of the following year.
Universal Credit is paid on a monthly cycle. Where a tenant has a weekly rental liability, they will have to make either 4 or 5 rent payments in any one month. This means that claimants are ‘overpaid’ by UC in months where they have to make four rental payments and ‘underpaid’ where they make five. But over time this broadly balances itself out. It is impossible to accurately align weekly and monthly payment cycles at all points in time.
Where a tenant makes a 53rd weekly rent payment on the last Monday of the 2019/20 year, only two days of that payment relates to a liability falling within that year (ie payment covering Monday and Tuesday of that week as Wednesday falls in the new year). Thus, five days of that payment is an advance payment for the following month and that month has only four Mondays and hence four rent payments. The combination of the advance rent payment and the ‘overpayment’ in April 2020 means that the shortfall is immediately recovered.
There is a separate issue with respect to the way the calculation in the Universal Credit regulations converts a weekly liability into a monthly allowance. The conversion is achieved by multiplying the weekly rent by 52 and then dividing by 12. This effectively means one day’s rent a year (two days in a leap years) are not covered by UC. We are currently considering whether this formulation around weekly rents, and potentially other weekly amounts in the UC calculation, should be amended.