The new welfare system outlined by the Conservative Government which is called Universal Credit will soon be coming online in 2016/17.
The purpose of UC will be to streamline benefit payments to individuals. Instead of applying for different benefits from different providers your account will be monitored and when circumstances change you will be automatically included or excluded from a certain benefit. The APA payment is the Alternative Payment Arrangement solution for late payment when a recipient is on Universal Credit.
The Department for Work and Pensions has published this guidance, “We would expect landlords to follow their usual rent collection practices. However, if the claimant is unable or unwilling to resolve a payment issue that puts them at risk of eviction, DWP can assist landlords by considering if a managed payment to the landlord (Alternative Payment Arrangement) is appropriate” (DWP, 2015). The DWP has published guidance that states if arrears reach the cut off levels of two months’ rent, the DWP will help support the tenant with budgeting skills and will use all mechanisms to undertake direct landlord payments in the future. However, this will be dependent on an individual case-by-case analysis. The DWP wants to help make UC a benefit that helps people get into work by budgeting on a month-by-month basis. This is the ‘pull-factor’ of UC and why the Government is spearheading its launch.
The Association of Residential Lettings Agents argues, “We are committed to making UC work for landlords as well as claimants. As a result of a recent successful trial, we are introducing an email channel for the submission of APA applications. The trial delivered excellent results in terms of reduced processing times and those landlords who took part in the trial have been very positive in their feedback” (ARLA, 2015). ARLA has worksheets available and information to all landlords unsure about Universal Credit and late payments.
These changes will impact on landlords. However, they will hurt social landlords’ more than private landlords. Furthermore, the APA payments mechanism will help as a support in case the worse happens. However, good dialogue with tenants and engagement is what ARLA, DWP and NLA believe is the best course of action. However, the ‘case-by-case’ nature of the scheme could impact on individual landlords as decisions could be seen to be unfair. However, more evidence is required and landlords will have a point of recourse with the DWP for late rent payments once the scheme goes live in 2016.