LHA – 2 weeks bonus payment!

LHA/Universal Credit News Update via the Property Tribes Network:

My recent bulletin http://universalcreditadvice.com/housing…ed-changes alerted you to, amongst other things, the introduction of a Housing Benefit “bonus”, in the form of an additional 2-week run-on of HB/LHA, for tenants transitioning to Universal Credit Full Service.

The payment is designed to help the tenant mitigate the wait until the first Universal Credit payment is made, 5 weeks after their initial claim. It should also help Landlords reduce the level of rent arrears currently being experienced by tenants moving to UC Full Service, GB wide.

The new arrangement, effective from 11th April 2018, is instigated by your tenants’ need to claim Universal Credit in a Full-Service area. Initially, this is most likely to apply to a tenant who has a change in circumstances.

For example, the tenant becomes unemployed, submits a sick note, stating they’re unfit to work, a single parent moves from Income Support, due to their youngest child becoming 5, or the tenant moves address.

In addition, from the summer of 2019, when DWP starts what it refers to as the “managed migration” period, existing HB/LHA claimants, in receipt of JSA, ESA, Income Support & Tax Credits, will be moved or forced over to claim UCFS and should all become eligible for the new payment.

The extra 2-week payment should be paid automatically and is triggered when the local authority receives a “stop notice” from DWP informing them that the tenant has been transferred over to UC. If HB/LHA is currently being paid direct to the landlord, then the extra payment will ordinarily be paid to the landlord as well. However, where the move to UC is caused by a “change of address” payment will be made to the outgoing tenant, even where the landlord is currently receiving “direct payments”.

The Residential Landlords’ Association has already noted its opposition to this believing payment should be made to the landlord, especially where rent arrears exist.

In the event the landlord does receive the extra payment it should be credited to the tenant’s rent account reducing or extinguishing any arrears that may exist.  Legally, direct payments under UC are made to the landlord “on behalf of” the tenant.

This means that if the account is up to date then the two weeks should be used as a credit towards future rent payments or refunded to the tenant.  The two-week run on is NOT intended to be a “bonus payment” for the landlord.

DWP reckon 2.3 million tenants will benefit from the new rule to the tune of £233 on average. For those in work, who receive HB/LHA, there could be an additional bonus as the level of their award will not be “means-tested”, resulting two weeks at the “eligible” rent level.

Overall, this new provision is to be welcomed by tenants and landlords alike. The fact that councils, rather than DWP, will be responsible for most of the administration is also a bonus as DWP’s track record to date, handling changes to legislation and associated processes, has not been good. Nevertheless, landlords should still remain vigilant during the transition process.

The same can equally said about the other changes mentioned in the earlier bulletin, which should all be in place by April 11th.

If you’d like to organise an in-house UC Full Service session for staff, perhaps in conjunction with one of your neighbouring councils/housing associations, please get in touch.

Alternatively, come along to our next marketed session in Edinburgh on 15th March 2018. Details here: http://universalcreditadvice.com/housing…e-delivery

If you require any further information on this or any other Universal Credit or Welfare reform matter, please contact me bill@ucadvice.co.uk or phone 07733 080 389.

Bill Irvine

UC Advice & Advocacy Ltd



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