A perverse incentive in the Universal Credit pilot scheme has already emerged which will mean that social housing tenants who go into rent arrears will be able to have the housing element of the new benefit sent direct to their landlord.
Universal Credit will feature Direct Payments, meaning that council or housing association tenants will receive a monthly cash payment towards their rent. At present Housing Benefits for social tenants go directly to social landlords in most cases.
This senseless move is based on yet another of Iain Duncan Smith’s pet obsessions, which is that housing benefits going direct to tenants will teach claimants to manage their money.
Housing Associations have been horrified by the changes, issuing warnings that they expect rent arrears to soar. The DWP’s panicky response to this has been to decide that claimants who fall two months in arrears will automatically have payments switched back…
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