At present the general rule is that housing benefit is paid direct to tenants, who then have the responsibility of paying it over to their landlords.
Needless to say many tenants find managing money difficult and fail to do this, leading to rent arrears, leading to landlords having to take proceedings to evict them, leading to landlords experiencing (often massive) losses due to these arrears and resolving never to take housing benefit tenants again!
And indeed in the present housing shortage there are usually plenty of non benefit tenants around, able to pay market rents which are often well in excess of the rents allowed by Housing Benefit.
Up to now been two ways that landlords can get payment direct to them when tenants are on housing benefit:
1. The eight weeks arrears rule
The rule in section 95(1)(b) of the Housing Benefit Regulations 1996 which provides for the benefit office to pay benefit direct to landlords if the benefit is eight weeks or more in arrears (which applies also now to situations where tenancy agreements provide for rent in advance)
2. The vulnerable tenant rule
If the tenant is classed as ‘vulnerable’ then the benefit can be paid to the landlord direct. However there has to be an application for this and the situation needs to be investigated by the benefit office first.
Are they going to be scrapped?
There are now a number of rumours flying round the Internet and elsewhere stating that the right for landlords to claim payment direct if a housing benefit tnenat is eight weeks or more in arrears is going to be removed
If this is true then it is going to have a very negative effect and will almost certainly accelerate the move by landlords away from housing benefit tenants.
However a Landlord Law Blog reader has drawn my attention to this quesiton and answer to W&P Minister Steve Webb where he says that the current arrangements are NOT going to be changed.
How far we can rely on this I don’t know. The Q&A is dated 30 April 2012. Does anyone else have any information on this issue?
Steve Webb was the one who informed parliament in December 2011 of the freezing of LHA rates to an annual review from 2012, a fact that had bypassed ministers in later announcements.
Its a complete nonsense again. Givernment have been pushing housing associations to got to “Affordable rents” (80% of the market level) and many social housing providers have followed their thinking and done just that, only now to be told they can only get HB direct if they then lower the rents that the government wanted them to raise in the first place.
UN-F**KING believable. Could this government be any more inept on housing issues?
Social l/lords from next year will start losing HB direct payments except in vulnerable cases (the rules have yet to explain what vulnerable means in this context).
One of the outcomes from the demonstration projects currently underway with various landlords is hoped to be clarity around this point.
However, in the sector it is recognised that some people who won’t fit the ‘vulnerable’ criteria will still have problems managing their money so it’s likely that they’ll be pushing for a similar rule to the 8 week one stated in the original blog.
They can apply for deductions direct from benefits at the moment but again, its unclear how that will work in the future once universal credit comes into being.
I’ll be watching your blogs with interest over the coming months – maybe the social housing sector can learn from the PRS in this?
Hi Tessa
I went to a days training at the CPAG and understood that the HB regulations would be ‘pass-ported’ through to Universal Credit. I cannot see anything in the draft regulations for UC that mention that direct payments are being scrapped.
I understand that getting agreement to pay direct for ‘vulnerability’ maybe become harder due to the decision being made by a faceless civil servant rather than someone at a more local level.
I have read the RLA article on direct payments being scrapped with interest because this is different to what was discussed at the CPAG training day.
Here is a link, for anyone who wants it, to the RLA news item http://news.rla.org.uk/index.php/archives/1316
What on earth is the objection to paying landlords directly? How often do we see a payment going to a tenant and being spent on all manner of things other than the rent? If HB were paid to the landlord as a matter of course, what’s the legitimate objection to it?
It now looks as if HB WILL be paid direct to landlords in at least some circumstances – see here http://www.insidehousing.co.uk/tenancies/universal-credit-to-support-payments-to-landlords/6522660.article
Far as I am aware LHA is to be part of Universal Credit from April 2013 so who does everyone suggest the current £26K a year proposed payment is paid to then?
It has to go to the tenant as it cannot be split up into its constituent parts.
Here’s something bigger to worry about.
I’ve been told by more than one source that LHA will be tail end Charlie when it comes to the calculation. So what happens if a claimant’s UC total has reached say £21K.
Yup that only leaves £5000 maximum they can receive for LHA, or £400 a month. That may be OK up north but down south in decent accommodation it ain’t going to cover the rent, or anywhere near it.