A controversial system that automatically approves landlord
requests to deduct tenants' benefits to pay rent arrears and
ongoing rent payments is being re-examined, Work and Pensions
Secretary announced today.
It comes amid concerns that the system – aimed at helping people
avoid issues with their landlords such as eviction - may actually
be pushing the poorest into debt.
Currently, a computer program automatically approves landlord
requests to deduct up to a fifth of someone's monthly Universal
Credit payments for outstanding rent repayments without them
being consulted by either their landlord or DWP.
The department will now look at this process and consider better
ways of ensuring landlords get the rent they are owed in a fair
and proportionate way while benefit claimants are protected from
falling into debt.
It comes as part of wider efforts by the Work and Pensions
Secretary to fix the broken welfare system to make it fairer and
ensure it improves living standards which will unlock economic
growth – a key commitment in the government's Plan for Change.
Work and Pensions Secretary, Rt Hon MP, said:
I am determined to right the wrongs that have persisted in the
benefits system for too long. The automatic approval of
landlords' requests for tenants' benefits to be deducted is one
of these.
As well as urgently reviewing this system, I am bringing forward
major changes to the health and disability benefits system so
that it works for everyone, underpinned by the biggest employment
reforms in a generation.
We will continue to listen to people's concerns, and transform
our benefits system to one of fairness, not punishment.
This decision comes in response to a high-profile legal challenge
in January, which was won by Nathan Roberts whose benefits were
deducted and automatically paid to his landlord to cover alleged
rent arrears and ongoing rent payments - despite a dispute about
repairs to the property. The Work and Pensions Secretary
has confirmed DWP will not
appeal this decision.
Minister for Social Security and Disability, Rt Hon Sir MP, said:
The benefits system needs urgent reform and we are taking action
across the board to do this – whether that's tackling the huge
accumulation of debt by Carer's Allowance recipients through no
fault of their own, or this automatic deduction of benefits
purely at the request of a landlord.
Combined with our efforts to Get Britain Working and our upcoming
health and disability benefits reform, all of this will lead to
better support for those who need it, and open doors for those
who can work.
This comes ahead of a manifesto commitment to deliver a wider
review of Universal Credit to ensure it is getting people into
work, making work pay and tackling poverty.
In April, the Universal Credit Fair Repayment Rate will also come
into force, reducing the cap on how much can be deducted from
someone's benefits from 25% to 15%. This means approximately 1.2
million households will keep more of their Universal Credit
payment each month, with households expected to be better off by
£420 a year on average.
