Welfare Reform and Work Bill — House of Lords, 2015-12-21
Topic: Housing
David Freud (Conservative, Centre-right): Half of those arrears were accrued in the first four-week period. We discovered in the direct payment project that there is genuinely an issue about moving people over in the first three months, and we are spending an enormous amount of energy and effort on pinpointing that. Indeed, we are doing a lot of work now with social landlords to get the problem under control I should point out that this proposition would be of greatest value to private landlords, as the social sector is much less volatile. It is not unrealistic to suppose that commercial landlords, like any other small business people, should make a certain amount of provision for bad debt. Rent payments can be made direct to landlords once arrears reach the equivalent of two months, which limits the degree of their exposure. Amendment 104BB would allow universal credit claimants to request that the Secretary of State pay their housing costs element to their landlord. The Secretary of State already has powers to pay all or some of a claimant’s universal credit entitlement to a third party where it would be in the claimant’s or their family’s interests. In practice, these powers are used to protect vulnerable claimants or claimants in rent arrears by paying the universal credit housing costs element direct to the landlord. However, as I have already said, the default position is for universal credit to be paid as a single monthly sum direct to the claimant; that is designed to mirror what would happen if the claimant was in full-time employment, when they would be responsible for managing their own funds and paying their own rent. The direct payment project showed that after 18 months the rent payment rate was 99%, which was comparable to now. Where there are problems, the department can manage payments and look to use the arrears option The amendment would also go further than the current arrangements for housing benefit, whereby the majority of private sector tenants are paid their housing benefit direct. To allow claimants to opt out of managing their own budgets while receiving universal credit would be a step backwards for them and a step away from claimants being job-ready I will need to answer the questions from the noble Baroness, Lady Sherlock, in writing, so I will cover those later Finally, my noble friend asked a question about Scotland. The Scotland Bill grants powers to Ministers to decide how to make payments but this is not a straightforward thing to do, because universal credit covers people who are in work and out of work and presumably you would not want to make payments to in-work people because perhaps the payments do not cover their rental elements. Therefore, it is a much more complicated issue than people realise when they do not understand completely how universal credit works The Government believe that work is the best route out of poverty and that universal credit should help, not hinder, claimants on their journey into employment so that they do not fluctuate in and out of work or go up and down the taper. Paying universal credit as a single monthly payment will ensure that claimants are best prepared for the transition to work and for staying in work. I hope that, on the basis of the explanations and reasons I have provided, my noble friend will withdraw his amendment.