Finance News

Fears over Impact of Universal Credit Scheme

Em Morley - December 27, 2009
Fears over Impact of Universal Credit Scheme

Fears over Impact of Universal Credit Scheme

The elimination of direct housing benefit payments to landlords will leave some homeless, and cause problems with rent collection to landlords, it is apprehended.

The Government’s new Universal Credit scheme will make payments direct to tenants. Currently, the housing benefit is paid to the landlord, meaning that they are certain to receive their rent payments and tenants know that they will not fall into arrears. The new scheme risks rental arrears and homelessness.

The Northern Ireland Assembly Member and Social Democratic and Labour Party Social Development spokesperson has requested that direct payment to landlords remains in Northern Ireland. They say: “The introduction of Universal Credit will cause many problems, not only for the vulnerable people whose welfare is being attacked but also for advice workers, charities, Government agencies, and significantly, providers of housing.”1

The Social Market Foundation has also voiced similar worries. They conducted research into the problem among low-income households, finding that the majority are opposed to the new scheme, and would prefer their housing benefit to be paid to their landlord.

The Foundation want the Government to provide an online budgeting tool for households affected by the scheme, to help them meet their rent payments.

Universal Credit is scheduled for introduction to the system in October 2013.