Housing Costs under Universal Credit: Inadequate, Mismanaged and Harmful
For too many people, the change from legacy benefits to Universal Credit has brought huge problems with their housing and ability to pay rent.
Z2K Caseworker Andy McCarthy describes one client’s experiences, and suggests what needs to be done to stop the current rollout of mismanagement.
Under the legacy benefit system Housing Benefit was administered by local authorities, but under Universal Credit the DWP are now responsible for providing housing costs. A main difference is that under the new system both housing costs and living costs are combined into one payment. The recurring mismanagement of housing costs has caused numerous problems for vulnerable claimants at every turn, as Natalie’s experience highlights.
MAKING A UC CLAIM
Natalie has severe mental health problems which make even leaving the house a massive hurdle to overcome. Her doctor has explicitly said that her mental health means she is currently not fit for work. Despite this at her Work Capability Assessment she was refused ESA, seemingly arbitrarily. Her ESA suspension automatically stopped her Housing Benefit being paid and she was advised to make a claim for Universal Credit.
Under legacy benefits it would have been simple to restart the Housing Benefit claim under Nil Income rules. Natalie would have had to choose whether to claim Job Seekers Allowance while she challenged her decision, or wait until her appeal was lodged and she would become eligible for the appeal rate of ESA.
However as she only wanted housing costs covered while she challenged her ESA decision, she was told she would not be able to open a UC claim. DWP staff said that in order to get housing costs she would have to agree to job seeking conditions. This caused Natalie to have a breakdown and she was scared to go back to the job centre.
After six months of no housing costs being paid, substantial rent arrears had built up and Natalie was evicted by her landlord. Only at this point (after half a year living on no money whatsoever) was she able to access specialist support for help making a UC claim.
THE WAIT FOR HOUSING COSTS
After receiving help from a Support Worker to make a claim for UC, Natalie thought her problems would be over. She provided all the documents required to assess her claim, including proof of the temporary accommodation she was placed in after becoming homeless. And yet housing costs were still not being paid. Despite her flagging this issue on her journal several times a week for three months, there was no rent being paid.
By the time Natalie was referred to us the local authority were trying to evict her from her temporary accommodation, having not once asked her why the rent wasn’t being paid or checking to see whether they could assist with the UC issues.
It was only through our intervention that we were able to establish that the client was not being paid housing costs because either: (a) the DWP did not request confirmation of rent from the local authority or (b) the local authority did not send this confirmation back. Either way, the fact that housing costs were not being paid was not Natalie’s fault. She was being threatened with a second eviction within a year due to Universal Credit.
MPTL AND THE BENEFIT CAP
Three months after her claim for Universal Credit, Natalie was finally awarded housing costs. However, as she was at this point in three months’ rent arrears, the local authority applied for Managed Payments to Landlord (MPTL) so the housing cost element was paid directly to them.
As Natalie had failed the Work Capability Assessment, she was now subject to the benefit cap. And as she was placed in expensive temporary accommodation, all of her capped allowance (£1,284) was sent directly to her landlord with £0 left for her living expenses.
Under the legacy benefit system this did not happen, as any money over the capped amount would be deducted from housing benefit. Although the cap in itself is deeply unfair and disproportionately affects people living in high-rent areas1, at least clients were not having their personal allowances reduced to cover housing costs. However as Universal Credit is seen as one combined payment when an MPTL is in pace the rent is prioritised over any living costs, leaving people like Natalie literally penniless.
The DWP’s reply was that the MPTL “could be removed but it is not a good idea as all that would happen is Natalie would use the money and not pay her rent putting her at risk of getting evicted.” Clearly the client’s need to eat is not considered as important as paying her rent.
As CPAG have highlighted2 there is no right to appeal in these circumstances, and a Judicial Review would need to be carried out. Luckily in Natalie’s case the local authority were able to pay a Discretionary Housing Payment (DHP) to cover any shortfall to both her personal allowance and her rent (the capped amount did not even fully cover her rent). However, the discretionary nature of these payments means they cannot be relied on and undoubtedly there will be similar cases where a DHP is refused.
CHANGING THE SYSTEM
The nature of benefits case work means we often see processes go very wrong, and through campaigning and policy work try to highlight ways for the system to be improved to help vulnerable adults. With the roll-out of Universal Credit continuing across London, the task has almost become Sisyphean. However, from this case there seem to be clear steps which would stop similar hardship in the future:
- Allow claimants to receive Universal Credit housing costs even if they do not feel able to sign a claimant commitment, especially if they are challenging a negative ESA decision.
- Local authorities should be following their pre-action protocols in temporary accommodation
- When MPTLs are in place, clients’ personal allowance should be protected so they can afford basic necessities.
Under Universal Credit, expectations from the advice sector are low. Yet the DWP still manage to amaze with their repeated mismanagement of claims, leaving vulnerable clients to endure multiple crises due to factors they have no control over. For a benefit promising to make entry into the workplace easier, the distress and poverty clients are subjected to under Universal Credit causes their recovery to stall and make ambitions of working even more difficult to achieve.
Published: 21st August, 2018
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