Payment of Universal Credit direct to landlords

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It will normally be up to the recipient to work out how much they need to pay to their landlord and to arrange to make that payment.

For people renting from their council or a housing association this is different to the existing system. At present people normally receive payments for living expenses (such as Income Support, Jobseeker’s Allowance or Child Tax Credit) themselves and a separate payment of Housing Benefit, intended specifically for their rent, straight to their landlord. For private renters, Housing Benefit is mostly paid direct to them but can be paid straight to their landlord.

The Government’s announcement means that, in some circumstances, it might be decided that the amount of Universal Credit that is intended for rent should be paid directly to the landlord. This could be because the tenant is in arrears and owes money to the landlord, or it might be that it is not in the tenant’s best interests to pay the money to cover housing costs straight to them. A decision maker from the Department for Work and Pensions (DWP) will decide whether this should happen. It will not happen automatically. The tenant, or sometimes the landlord, will have to let the DWP know that they want this to happen. They will then consider the case individually and decide who should receive the payments.

When are payments made directly to the landlord?

If the tenant is more than two months in arrears with their rent, payments will be made directly to their landlord until the amount that they owe is cleared. The payments will then normally switch back to the tenant.

If the DWP decide that it is not in the tenant’s best interests to pay them the money for rent they might pay the amount for rent direct to the landlord every month, even if they are not in arrears. The tenant will then receive what is left of their Universal Credit themselves, to pay for living costs. Sometimes they might have to top up their rent payments if their rent is especially high.

Although each case is looked at individually, some reasons why it might be decided that it is in the tenant’s best interests to have their rent paid directly to their landlord include:

  • The tenant has a history of rent arrears
  • They have severe debt problems
  • They are unable to manage your affairs due to a disability or illness
  • They have an alcohol, drug or gambling dependency
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