The Department for Work and Pensions (DWP) has just confirmed that they are changing the way they handle rent arrears via the Universal Credit system. This news will be music to the ears of any Landlord or Agent who has experienced the current slow, and sometimes baffling, process.
Current System for Universal Credit Rent Payments
At the moment, Direct Rent Payments are made using a relatively efficient process. Using the Apply for a Direct Rent Payment (ADRP) forms, a landlord will receive payment via bank transfer, seven days after the claimant’s assessment period ends.
Rent Arrears Payments, however, are made independent of the managed rent payment process and timeline. They are done via the landlord being assigned a creditor reference number from the DWP, with payment being made anything up to nine weeks after the rent arrears claim.
Changes to Universal Credit Rent Arrears Payments
The change, which is expected to be introduced in February 2022, will apply to payments across the UK and see Universal Credit Rent Arrears Payments calculated at the same time as Direct Rent Payments.
The ADRP forms will remain in existence, but the changes will remove the application of the landlord creditor reference number with payments made via bank transfer.
These changes apply to payments across the UK but will affect only new applications for rent arrears deductions made by landlords. For existing claims, where a landlord has already been assigned a creditor reference number, they will continue to follow the existing system.
For current Government guidance for landlords on Universal Credit and rented housing see here; https://www.gov.uk/government/publications/universal-credit-and-rented-housing–2
We are happy to help any landlord understand and keep up to date with Government regulations. Call us for a chat today;
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