As a landlord, you may find yourself renting to a tenant who receives Universal Credit, so it is important to have a strong understanding of the system.
Let’s take a look at what Universal Credit is, how it affects rent payments, and how you can support tenants who receive this benefit.
Contact your local Whitegates branch today for expert rental guidance.
What is Universal Credit?
Universal Credit is a welfare benefit system provided by the government to support individuals and families with their living costs, including housing expenses. There are numerous reasons why individuals may be eligible for universal credit, including illness, carer responsibilities, and unemployment.
To be eligible for Universal Credit, the individual must be aged between 18 years old and their state pension age, not be in full-time education, and not have over £16,000 in savings or investments. The monthly amount that the claimant is eligible for varies based on the individual’s specific circumstances.
It usually takes five weeks from the application date for a claimant to receive their first Universal Credit payment, but they can apply for a repayable advance to help pay for housing costs during this time period.
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How do tenants who receive Universal Credit pay rent?
Most of the time, the tenant receives Universal Credit directly and then pays the rent to their landlord. Tenants can opt to pay rent via a monthly direct debit, however some may feel uncomfortable with this if they have only recently begun receiving Universal Credit or have had issues with direct debits in the past.
What is an Alternative Payment Arrangement?
Some tenants may decide to apply for an Alternative Payment Arrangement (APA), which changes how they receive Universal Credit. One APA available to claimants is a Managed Payment, where the amount of rent is paid directly to the landlord, rather than to the tenant first.
APAs are considered on a case-by-case basis, and can be suggested by the claimant’s work coach or case manager if they feel the individual is at risk of falling into rent arrears. As a landlord, you are also able to apply for an APA if you’re looking for some extra financial security.
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How to help tenants who receive Universal Credit
Be understanding
If you rent to a tenant who receives Universal Credit, it is important to be patient and understanding with them, especially if they are new to the process. It’s a good idea to discuss payment dates with the tenant to make sure they align with the date they receive their Universal Credit payment.
Encourage communication
Your tenant’s financial circumstances could change at any time, so it’s crucial to stay in regular contact with them. By being supportive and encouraging open communication, you are able to adapt to any requirements your tenant may have in a timely manner.
Seek advice
Navigating Universal Credit can be daunting for both tenants and landlords, so seeking advice is key if you have any doubts or concerns. Using our extensive knowledge and experience in lettings, we can help you fully understand the complexities of Universal Credit and provide you with ongoing advice and guidance based on the specific details of your tenancies.
