Thousands claiming housing benefits warned of major change in payments

The Department for Work and Pensions (DWP) has just announced a major change for those claiming housing benefits.

Thousands of families will be moved to the Universal Credit as DWP continues to implement its benefits migration scheme.

Low-income families who already struggle with making ends meet could be left at risk of falling into debt with their landlords due to this benefits shake-up, experts warn.

Meanwhile, an investigation has recently revealed that 17 MPs from the leading Conservative party have earned over £15 million from their side hustles since the start of the pandemic. Two other parties have only three high-earning MPs who pocketed a little over £2 million combined.

PM Rishi Sunak, also from the Tory camp, continues making headlines with his extraordinary wealth.

The housing element will now come with your Universal Credit payment

Data shows that over two million people are still on old-style legacy benefits but the DWP is planning to change it and move the majority of them to Universal Credit by the end of 2024.

These struggling households will no longer have their rents paid automatically to their landlord. Instead, the housing element will be a part Universal Credit and will come directly into their bank accounts with the rest of the total monthly payment.

It is then the responsibility of the tenant to pay their landlord.

Some people on housing benefits have already moved from housing benefit to Universal Credit because of a change in circumstance, or out of choice.

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Replacing housing benefits with Universal Credit can be a problem

Experts warn that cash-strapped families could find it difficult to pay their rent on time due to the major change and may end up in arrears.

A report by the Child Poverty Action Group found that some of those who have already moved have fallen into debt because of it.

The charity wrote:

Claimants moving from housing benefits to Universal Credit through natural migration often fall into rent arrears as they adjust to the system of using their monthly benefit payment towards their rent.

The organization urged DWP to put extra effort into raising awareness of the major benefits shake-up amongst those who are entitled to it.

The charity also warned that households that already struggle with debt or a mental health conditionare at increased risk of getting impacted by the change.

Here is how DWP can help

According to DWP, those on housing benefits moving to Universal Credit will ‘receive an additional two weeks housing benefit when they start their claim’ which will help prevent rent arrears as people start adapting to the new monthly payment cycle.

But those who struggle with the change will still be able to benefit from direct payments to landlords, also known as alternative payment arrangements (APA) and managed payments to the landlord (MPTL).

To apply for those options, make a note in a journal in your online Universal Credit account, speak to your work coach or case manager or phone at 0800 328 5644.

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Sources used:

- The Sun: 'Urgent warning for thousands on benefits as major change could plunge renters into debt'