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Deductions for rent arrears
Good Morning to all members,
I have a query relating to deductions from UC made to LA for rent arrears. Currently claimant has £3500 outstanding rent arrears and has a manged payment for 10% of her standard allowance which goes direct to LA.
She recently had a WCA and was awarded LCWRA element which resulted in a back payment of £1318.98 .
There is an entry on her journal advising that “Rent arrears are over £3500, we are obliged to pay LA the underpayment to help reduce your rent arrears”.
Therefore, all of her LCWRA backpay has been paid across to LA rent account.
Is this allowed as I have not come across this before and understood that maximum deductions for rent arrears are 20%.
Any thoughts will be greatly appreciated.
I’ve seen them do this for DWP and old tax credit debt, but never rent arrears. In fact I had one tenant where my work resulted in them getting about £2,000 underpayment and it was quite annoying that DWP chose to use it to clear historic tax credit debt rather than our rent arrears. This was a couple of years ago. We wrote to the debt management people and asked them to pay it to the rent arrears but I don’t think we even got a response.
So I think the answer is that even where there are DWP debts, they are not obliged to take them from an underpayment - it is at the discretion of the DWP. I am not aware of any rules allowing them to pay an underpayment to a third party outside the rules in Regs 59-60 and the Schedules to the Claims and Payments Regs - but perhaps there’s some guidance somewhere?
Incidentally (and pedantically) a managed payment (to landlord) is an Alternative Payment Arrangement - it just covers ongoing housing costs. Arrears payments are from a third party deduction (a “direct payment”). It’s helpful to differentiate because the rules and the payment methods are different. The rate will be between 10% and 20% of the AP - at UC’s discretion. We found that a lot of TPDs went up to 20% while the Covid uplift payment was being paid, but they’re mostly back down to 10% now.