Universal Credit payment loophole could leave hundreds of thousands of renters out of pocket
The admin error will hit tenants who receive help with housing costs and pay their rent on a weekly basis.
Renters who pay their landlords at the start of every week are set to miss out, according to the National Housing Federation (NHF) which represents more than 900 housing association landlords and managers.
This is because monthly Universal Credit payments are worked out based on 52 weeks in the year – but this year there will be 53 Mondays.
Despite this, claimants will still receive the same amount as if there were only 52 Mondays, leaving society's most vulnerable at risk of falling into rent arrears.
In a letter to the NHF, the Department for Work and Pensions insisted that it has "no plans" to change the way it's calculated to help vulnerable Brits with their housing costs because it's "complicated."
What to do if you have problems claiming Universal Credit
IF you're experiencing trouble applying for your Universal Credit, or the payments just don't cover costs, here are your options:
Apply for an advance – Claimants are able to get some cash within five days rather than waiting weeks for their first payment. But it's a loan which means the repayments will be automatically deducted from your future Universal Credit pay out.
Alternative Payment Arrangements – If you're falling behind on rent, you or your landlord may be able to apply for an APA which will get your payment sent directly to your landlord. You might also be able to change your payments to get them more frequently, or you can split the payments if you're part of a couple.
Budgeting Advance – You may be able to get help from the government to help with emergency household costs of up to £348 if you're single, £464 if you're part of a couple or £812 if you have children. These are only in cases like your cooker breaking down or for help getting a job. You'll have to repay the advance through your regular Universal Credit payments. You'll still have to repay the loan, even if you stop claiming for Universal Credit.
Cut your Council Tax – You might be able to get a discount on your Council Tax or be entitled to Discretionary Housing Payments if your payments aren't enough to cover your rent.
Foodbanks – If you're really hard up and struggling to buy food and toiletries, you can find your local foodbank who will provide you with help for free. You can find your nearest one on the Trussell Trust website.
Catherine Ryder, head of policy at the NHF, has described it as a "really serious situation" and that this "whole mess is entirely avoidable".
Bolton and Home housing association estimate that 4,000 tenants claiming Universal Credit will miss out on an average £75 – one week's rent, while Rochdale Boroughwide reckon almost 3,000 renters could be left in arrears.
Even though an extra week in the tax year occurs every five or six years, this will be the first time hundreds of thousands of claimants will be affected since the Government first launched it's controversial benefit scheme back in 2010.
The system, which rolls six benefits into one, has been riddled with issues since its launch, which is why The Sun is campaigning to Make Universal Credit Work.
Kate Henderson from the group told The Sun: "Tenants will need to find other sources of income, perhaps even cutting back on other expenses.
"If they can't find the money, they are likely to fall into arrears."
The Sun wants to Make Universal Credit Work
One million people are already receiving it and by the time the system is fully rolled out in 2023, nearly 7 million will be on it.
But there are big problems with the flagship new system – it takes 5 weeks to get the first payment and it could leave some families worse off by thousands of pounds a year.
And while working families can claim back up to 85 per cent of their childcare costs, they must find the money to pay for childcare upfront – we’ve heard of families waiting up to 6 months for the money.
Working parents across the country told us they’ve been unable to take on more hours – or have even turned down better paid jobs or more hours because of the amount they get their benefits cut.
It’s time to Make Universal Credit work. We want the government to:
- Get paid faster: The government must slash the time Brits wait for their first Universal Credit payments from five to two weeks, helping stop 7 million from being pushed into debt.
- Keep more of what you earn: The work allowance should be increased and the taper rate should be slashed from from 63p to 50p, helping at least 4 million families.
- Don’t get punished for having a family: Parents should get the 85 per cent of the money they can claim for childcare upfront instead of being paid in arrears.
Together, these changes will help Make Universal Credit Work.
Join our Universal Credit Facebook group or email [email protected] to share your story.
A spokesperson for the DWP told The Sun: "No one on Universal Credit will be left with a week's rent shortfall as a result of having 53 rent payments in a year.
"Having 53 rent days does not mean paying more rent over a year as most of the final payment will cover the first week's rent for the following year."
The DWP also points out that it provides struggling claimants with budgeting advice and pays rent directly to landlords if requested.
Claimants may also be able to get extra help by applying to the Flexible Support Fund – and you won't have to pay it back.
You can also apply for an advance loan or budgeting loan to help with any emergency bills while you wait for your first payment.
As the Government continues to roll out the scheme to new and existing benefit claimants, it's expected that 3.2million people will be worse off.
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