Universal Credit Demonstration Project
This is changing the way housing benefit is paid in the social sector. The new project will see some tenants in the social rented sector receiving monthly housing benefit payments, paid directly to them for the first time.
The projects will help government understand the best ways of communicating these changes to tenants, providing assistance with budgeting to ensure tenants successfully pay their rent, supporting tenants and landlords experiencing financial difficulties and developing appropriate safeguards to protect landlords' financial position if tenants do get into arrears.
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DWP Press Release: Councils and housing associations to test direct payments of housing cost support
Local authority and housing association partnerships are named today as the successful volunteers the Government plans to work with on pioneering demonstration projects that will see claimants in the social rented sector directly receiving monthly housing benefit payments and paying rent to landlords themselves for the first time.
The demonstration projects, which will take place from June 2012 until June 2013, will test how claimants can manage housing benefit monthly payments ahead of the introduction of Universal Credit from October 2013.
The projects will also look at the appropriate level of safeguards needed to help secure landlord income streams if tenants fall behind on their rent.
The local authority and housing association partnerships named for the demonstration projects are:
Each will be involved in testing out different elements of the project, including testing different trigger points when social landlords should receive direct payments if tenants fall into specified levels of arrears. The projects will also inform how best to communicate the changes to claimants, provide assistance with budgeting to successfully pay their rent, and support claimants and landlords experiencing financial difficulties.
Minister for Welfare Reform Lord Freud said:
Alongside this measure, Ministers are working with the banking sector, credit unions, supermarket financial services and the Post Office to explore opportunities to develop cost-effective budgeting accounts for claimants moving onto direct payments.
The Government has also commissioned a review of the projects led by Professor Paul Hickman from the Centre for Regional Economic and Social Research at Sheffield Hallam University. The review will evaluate the impact of direct payments on claimants and vulnerable groups, as well as local authorities and social rented sector landlords.
While the majority of Universal Credit claimants renting in the social sector will be responsible for making their own rent payments to landlords, vulnerable claimants and pensioners will continue to have their housing costs paid direct to their landlord.
Notes to Editors: