Universal Credit - information for landlords

Universal Credit is a new type of support that is replacing six benefits including Jobseeker’s Allowance and Housing Benefit. It’s being introduced gradually in stages. This page summarises the changes and key dates landlords need to know about if they have tenants who are on Housing Benefit.

What is Universal Credit?

Universal Credit is a new monthly payment for people who are either unemployed, or working but on a low income.

It will eventually replace all of the following benefits and tax credits:

  • Income Support
  • Child Tax Credit
  • Housing Benefit
  • Working Tax Credit
  • Income-based Jobseeker’s Allowance
  • Income-related Employment and Support Allowance

What is different about Universal Credit?

Help with housing costs

Universal Credit includes a housing element that will replace Housing Benefit.

This is paid direct to the tenant who is responsible for paying their own rent.

In advance of Universal Credit being rolled out more widely, some housing associations or councils will be introducing ‘direct payment’.

With direct payment, tenants will start receiving their Housing Benefit payment direct rather than having their rent paid for them.

Universal Credit and current benefits compared

  Current benefits and tax credits Universal Credit
How it’s paid If a tenant doesn’t have a bank, building society or credit union account, their payment can go into a Post Office card account or - in some circumstances - onto a Simple Payment card. Directly into the customer’s bank, building society or credit union account.
How often it’s paid Benefits are normally paid fortnightly and tax credits are normally paid weekly or every four weeks. Universal Credit is paid monthly.
Number of payments Each benefit is paid separately. A single Universal Credit payment.
Help with rent Housing Benefit can be paid straight to the landlord. The housing element of Universal Credit (help with rent) goes direct to the customer who has to arrange their own rent payments to their landlord.
Who receives the money Some of the benefits and tax credits being phased out can be paid to either partner in a couple and some go to the partner who does most of the childcare. Universal Credit is a single payment per household into a nominated bank account. If a couple are claiming Universal Credit the bank account can be in the name of either partner or a joint account in both names.

Other differences with Universal Credit

The claims process and what happens to someone’s payments when they start working (or increase their hours) are also different under Universal Credit.

  Current benefits Universal Credit
How to claim People can claim benefits and tax credits by completing paper forms, over the phone or sometimes by filling in forms online. Most customers will make their claim for Universal Credit online, although anyone who needs it will be able to get face-to-face advice or help over the phone.
Working and claiming If someone is working 16 hours or more per week they will no longer qualify for some benefits. There are no limits on how many hours a week someone can work if they’re claiming Universal Credit. Instead the amount of Universal Credit they get will gradually reduce as they earn more.

The Money Advice Service leaflet ‘Get ready for Universal Credit explains what people need to do to prepare for the changes. It’s ideal for handing out to your tenants.

You can either:

When does Universal Credit start?

Universal Credit is being introduced in stages. Most people won’t be affected to start with.

Right now, Universal Credit mostly affects newly unemployed people in certain areas of the country.

From April 2017, young people aged 18 to 21 who make a new claim for Universal Credit who are out of work will not be automatically entitled to housing support.

If you live in Scotland, the Scottish government has said it will continue to pay Housing Benefit to 18 to 21-year-olds through the Scottish Welfare Fund.

There will be some exceptions for vulnerable people who can’t live with their parents and for those who were in work for at least six months before making a claim.

You can find out where it’s currently possible to claim Universal Credit on the GOV.UK website.

Need more information from the Department for Work and Pensions

The Department for Work and Pensions (DWP) has published some frequently asked questions from landlords relating to Universal Credit and rent payments.