UC & Rent Periods– Moving to monthly/ 4 weekly rent can have big dangers

Some landlords are moving to monthly or 4 weekly rent, thinking it will help tenants on UC to budget.  They may be very wrong and it could make it much harder.  See https://benefitsinthefuture.com/universal-credit-rent-landlords-be-cautious-about-being-helpful/ for a bit of detail on why.

Thanks Gareth, very interesting and quite worrying.

Spotted small typo or lost text in para’s after the table 1 - it’s the section as follows:

person it will either be four or five. All

you can see from the table that in some months there will be no monthly pay and four….

Yes very interesting. Seeing the impact on disposable income of different payment patterns in such clarity is useful as we all know it happens but it is hard to get your head round!

Also the explanation re: 53 weeks issue is the best I have ever read!

Paul_Treloar_AgeUK - 17 February 2020 10:41 AM

Spotted small typo or lost text in para’s after the table 1

Thanks Paul, tidied up now.

JoW - 17 February 2020 10:53 AM

Also the explanation re: 53 weeks issue is the best I have ever read!

Thanks (preen); to avoid confusing people that’s in a different post https://benefitsinthefuture.com/weekly-rent-and-universal-credit-dont-panic/

I might need a bit of convincing on chart/table 3 - perhaps I am being a bit dense.

The chart is describing, by reference to the UC payment times, a situation where:
(1) The couple have applied for UC at the most awkward time possible (the end of the month)
(2) The rent payment date is set at the last banking date of the month.
(3) The couple always pays their rent exactly when it falls due.

If instead of (3), the couple pay one months rent every UC payment date, then they will be in a situation where they fall one month into arrears once every three month cycle - which is probably more tolerable to the landlord than the current mess - and if we change either (1) or (2) so that either the claim is made some time in the middle of the month or the landlord wants rent paid on the 15th of the month, then isn’t the outcome much more sensible?

Elliot Kent - 17 February 2020 12:30 PM

I might need a bit of convincing on chart/table 3 - perhaps I am being a bit dense.

The chart is describing, by reference to the UC payment times, a situation where:
(1) The couple have applied for UC at the most awkward time possible (the end of the month)
(2) The rent payment date is set at the last banking date of the month.
(3) The couple always pays their rent exactly when it falls due.

If instead of (3), the couple pay one months rent every UC payment date, then they will be in a situation where they fall one month into arrears once every three month cycle - which is probably more tolerable to the landlord than the current mess - and if we change either (1) or (2) so that either the claim is made some time in the middle of the month or the landlord wants rent paid on the 15th of the month, then isn’t the outcome much more sensible?

You’re not being dense, and I emphasised that it’s looking at “a minority of people with particular rent dates close to the Universal Credit assessment period dates,”  That said, the results are real, and do apply to people in that situation.  They may be a small number but they exist.  I’m not sure that recommending they deliberately go into rent arrears will appeal to many landlords, and a pattern of arrears could cause them many problems.

“The DWP have been carrying out a trial where, for those they pay rent directly to the landlord, they pay each calendar month. Previously those people who had their rent paid direct the landlords have been getting paid every four weeks, so 13 times a year. This new arrangement, which aligns the rent period to the tenants Universal Credit period is expected to save social landlords thousands of hours in administrative work.”

I thought that people on APAs landlords are paid 12 times, representing a monthly amount, with one of the 13 payment cycles not being paid. Have I got that wrong?

They are paid 12 times on a four weekly cycle so as you say one payment a year is missing. Basically a month’s rent is paid in each assessment period but at different times each period depending when the third party payment date falls

Gareth Morgan - 17 February 2020 12:42 PM

I’m not sure that recommending they deliberately go into rent arrears will appeal to many landlords, and a pattern of arrears could cause them many problems.

Well quite - but I suppose that, given UC, it might not be an unreasonable approach. (A better course would for them to pay the rent out of the monthly salary once its received).

I’m just not sure this is worse than if the couple were charged weekly; if the rent is due in advance each Monday, then wouldn’t the rent account show arrears every Monday in 2020 until 30/03 when UC catches up; only to fall into arrears again on 06/04 and not catch up again until 29/06. So we still have a three monthly cycle, except that the tenants read as being in arrears for 12/13 weeks rather than 1/3 months.

Not saying I know the answers to any of this by the way - just interesting to talk through.

BC Welfare Rights - 17 February 2020 01:18 PM

I thought that people on APAs landlords are paid 12 times, representing a monthly amount, with one of the 13 payment cycles not being paid. Have I got that wrong?

No, you’re right.  I’ll clarify that.

Oops, I had to amend the charts and tables in my recent post about Universal Credit’s pay and rent periods, as there were some misalignments, sorry.  Corrected version is still at https://benefitsinthefuture.com/universal-credit-rent-landlords-be-cautious-about-being-helpful/ . (That’ll teach me to write a clever calculation checker that relies on the same (wrong) pointer).

Neil Couling has tweeted an article by Inside Housing reporting that -

Universal Credit systems have been changed so that social landlords receive direct rent payments on the same cycle as their tenants receive their benefits

So guessing this is fully rolled out now?

Does it only apply to social housing tenants?

We started on the new system in October. I estimate it reduced our overall arrears by over £60,000, and reduced our workload and that of DWP (in terms of verifying payments, and explaining why it sometimes takes 33 days for a payment to get to the rent account, etc.).