The direct payment of Housing Benefit to landlords rather than tenants is back on the table, according to Welfare Minister, Lord Freud. In a speech to the National Housing Federation conference, he said that landlords will receive benefit payments directly as part of the new universal credit system. If their tenants fall into rent arrears, Lord Freud said that the main aim of this measure was to protect the credit ratings of housing providers and enhance their ability to borrow and invest. Trials will commence shortly, with the policy expected to be implemented in 2013.
Lord Freud said: “I remain absolutely convinced that there are mechanisms available that will allow us to introduce a single universal credit while also providing protection for the housing sector.” But don't get too excited. He also confirmed that payments to tenants would remain the norm and payments to landlord would only come into place for about 10% of tenants who are considered the most at risk.
The announcement comes hot on the heels of research from Policis, that showed 90% of social housing tenants actually want their housing benefit paid directly to their landlord. These findings were published in Inside Housing.
The universal credit is a coalition government landmark policy. It will combine all a claimant's welfare benefits into a single payment. It is hoped that this simplification will streamline the welfare system and cut costs.
The chief executive of the National Housing Federation, David Orr, called for more flexibility: “Why not give people the choice to ask to have their rent paid direct to their landlord? Retake the opportunity for individual tenants to choose to have their rent paid direct, then we will be with you all the way.”