Rent arrears soar among universal credit claimants

13 Nov 18

Council tenants claiming universal credit owe on average more than two-and-a-half times the rent arrears of claimants on the previous housing benefit system.

Rent owed by universal credit claimants in the UK is £663 compared to just £263 for those on housing benefit, according to Freedom of Information data obtained by BBC Panorama.

Flintshire in north Wales, was one of the first areas to roll out the new welfare system and the council estimates that, since the roll out, rent arrears have soared by £1m.

Flintshire County Council said this week that tenants on the new benefit system in the council owe an average of four times as much rent as those on old benefits.

Universal credit, the Conservative government’s flagship benefits policy, combines six benefits into one, paid directly to the claimant on a monthly basis.

Implementation of the scheme has been beset by delays. It was supposed to be fully operational by April 2017 but full roll out has been delayed until December 2023.

Data published by the Department for Work and Pensions today shows that, as of August 2018, around one in six new universal credit claimants fails to receive full payment on time.

This represents an improvement from the same time last year with the percentage of claimants receiving payments on time rising from 74% to 84%.

The data showed the number of people now receiving the benefit stands at 1.3 million and the average payment received by households stands at £650 per month.

In his Budget last month, Chancellor Phillip Hammond said the universal credit system was “here to stay,” and announced a £1.7bn increase to work allowances and an extra £1bn to help with the transition to the scheme.

An investigation by PF last year found that councils were braced for rising rent arrears because of universal credit roll out and were siphoning off resources to put into emergency hardship funds.

Meanwhile, a report published by the Resolution Foundation think-tank yesterday estimated that, despite Hammond’s Budget announcement, three million people are due to be worse off under universal credit, compared to the outgoing system.

Laura Gardiner, research director at the Resolution Foundation, said the government’s extra investment meant that, “for the first time since early 2015, universal credit is set to be more expensive than the legacy benefits it is replacing”.

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