Applying for direct payments of Universal Credit
Introduction
This guide explains how and where a landlord can make a request for direct payments through the Universal Credit system and apply for deductions from the tenant's ongoing Universal Credit payments to recover outstanding rent arrears, but only where the tenant continues to live in the property to which the arrears relate.
What is Universal Credit?
Designed as a means of simplifying the welfare system in the UK, Universal Credit is a welfare payment that merges six benefits into one payment:
- income support
- income-based jobseeker's allowance
- income-related employment and support allowance
- housing benefit
- child tax credit
- working tax credit
In most cases, this will be paid monthly as a single payment directly to the tenant as the original intent of Universal Credit was to allow claimants to manage their finances themselves.
Can my tenant claim Universal Credit while working?
Yes, Universal Credit is designed so that payments taper off as the tenant's earnings increase. If they are receiving support with their housing payments they can earn up to £292 a month without it affecting the full payment of Universal Credit.
You and your tenant can use the Government's benefits calculator to assess how much they will receive in support from Universal Credit.
How much is my tenant entitled to for the housing element of Universal Credit?
Provided your tenant is entitled to housing support they will be able to claim up to a maximum of the thirtieth percentile of market rents in the area. Any more than that will need to supplemented from the tenant's other income.
This rate will vary based on circumstances with different areas having different market rents. Your tenant's circumstances may also affect the size of the property they can claim for.
Further information on this can be found in our LHA resource page.
The rest of this content is available if you have registered on the NRLA website
This page covers how to apply for direct payments, how to manage them once the direct payment has been arranged, and what help is availabe to tenants while they wait for a Universal Credit claim.