Martin Williams looks at some common problems with the housing element of universal credit (UC).
Housing costs not reported at initial claim
CPAG has seen cases where, when making a new claim for UC, the claimant has failed to report her/his housing costs. That seems to have happened in the past because the online form asked ‘do you pay rent?’ For many claimants in receipt of housing benefit (HB) covering their full rent, the appropriate answer seemed to be ‘no’ (and, indeed arguably, in particular for local authority tenants whose HB the form of a rent rebate, that answer could be regarded as correct). Now the form also asks whether the claimant receives HB.
The approach of the decision maker in such cases has sometimes been to only add the housing costs element of UC from the start of the assessment period in which the housing costs are first notified.
This is wrong, because the initial decision on entitlement to UC, in deciding that the claimant did not have housing costs, was simply wrong on the facts. A decision which is wrong can be challenged by way of revision (‘mandatory reconsideration’) for any reason.1 A late application for revision made within 13 months of the decision challenged, even when there are no good reasons for lateness, will still give rise to a right of appeal once it has been refused.2 In such an appeal, the tribunal stands in the shoes of the decision maker who made the original decision and can give any decision that decision maker could have done.3 So the tribunal can decide for itself what the facts were at the date of claim. Importantly, the reasons why the claimant did not state that s/he had housing costs are irrelevant here – it is a simple question of whether s/he had the liability to pay rent at the start of the award or not. The DWP maker is wrong thinking that these are ‘change of circumstance’ cases where the change has been notified late – if that were right, then the date from which the change can take effect is indeed the start of the assessment period in which it is notified.4However, here there is no change of circumstance, rather there is a change in the information known to the decision maker.
Managed payments to landlords where claimant subject to benefit cap
CPAG has also seen cases where the DWP is making direct payments from UC for ongoing rent (a ‘managed payment to landlord’ or ‘MPTL’) but claimants are subject to the benefit cap and/or have rent significantly below what is covered by the UC housing element. That can leave claimants with no income for themselves in an assessment period (if the amount by which UC is capped plus any shortfall between the rent and the housing costs element is equal to, or exceeds, the standard allowance and any other elements received for children etc).
Claimants in this situation should be able to request that the MPTL arrangement ceases or is amended so that less is paid direct to the landlord in respect of rent, so that they can receive at least some UC paid directly to them. (Note: separately from these MPTL arrangements, in Scotland a claimant in a full service area may request that the housing element is paid in full direct to the landlord.5)
The legal power to make MPTLs for current rent direct to the landlord is regulation 58 of The Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Decisions and Appeals) Regulations 2013 No.381. Crucially, such deductions are only lawful where it appears to the decision maker to be ‘necessary to protect the interests of’ the claimant, her/his partner or child or a severely disabled person for whom the claimant is regularly and substantially caring. While it is in the interest of a claimantto pay the rent to avoid being evicted, it isalsoclearlyinher/hisinteresttohavemoneyto buy food and so on and indeed that is perhaps a more important and immediate interest in many cases. Thus a decision that a claimant should starve to ensure s/he is housed can be argued not to be in the interests of the claimant.
However, any legal challenge would not be by appeal. If the DWP refuses to change the MPTL arrangement, that is challengeable by way of judicial review – with the grounds being either that the decision maker had failed to consider the claimant’s best interests altogether or had decided the issue irrationally.
Deductions for rent arrears
Further errors appear to occur with the imposition of direct deductions for rent arrears. An amount of between 10 and 20 per cent of the standard allowance (ie, from £31.78 to £63.56) may be deducted from UC and paid to the landlord in respect of rent arrears (provided the claimant has not earned up to or more than the work allowance in the preceding three assessment periods).6However, the DWP’s approach appears to be to automatically take the maximum 20 per cent figure.
In a case where the claimant would in any event be having other deductions up to the permissible total of 40 per cent, then that seems sensible (with the bulk of deductions going to the most important debt).
However, where that is not the case, the DWP should arguably be deciding whether the deduction should be at the lower rate – certainly it must do so if the claimant makes representations.
When one considers that the typical order of the County Court in England and Wales in
making a suspended possession order is that a tenantmustmeetcurrentrentplus £3.70 a week (or £16.04 a month), it is clear thateven the lower of the amounts deducted from UC for rent arrears is high. It is unfortunate that there is no legal mechanism provided by the DWP allowing deductions at rate which is typically ordered by the courts. The issue of whether the County Court could stipulate that a landlord is not allowed to use the direct deduction rate is one for housing lawyers, but from a benefits point of view, it should be noted that the DWP power to make deduction for rent arrears, even where the conditions for doing so are met, is a discretionary one. Arguably, it would be unlawful for the DWP to exercise that discretion in favour of a landlord where the Court had already undertaken an assessment of what could be affordably paid and ordered a lower amount. Again, however, if the DWP refuses to stop making the deduction, any legal challenge would have to be brought via judicial review rather than appeal.
A final common problem to highlight concerns the situation where a claimant is a joint tenant but the other joint tenant is no longer living at the address. In that case, the DWP sometimes only awards partial housing costs (using the formula of dividing the total rent by the number of joint tenants and multiplying by the number of these that are relevant family members – as described on page 96 of the CPAG’s Welfare Benefits and Tax Credits Handbook). An alternative twist is where the claimant is not named on the tenancy agreement but is making payments in order to be permitted to continue to occupy the property – eg, as the tenancy was in the name of a former partner who has now moved out. Here, the DWP may refuse to pay altogether. These two related situations need to be analysed separately.
In the first case, the claimant is legally liable to pay the full rent. The problem is with the apportionment of that rent under Schedule 4 paragraph 24 to the Universal Credit Regulations 2013 No.376 (UC Regulations). Importantly, sub-paragraph (5) allows the decision maker to disapply the normal system of apportioning the rent between joint tenants, if s/he is ‘satisfied that it would be unreasonable to allocate the amount’ under those rules. Unfortunately, as is all too common with the guidance in Advice for Decision Making, decision makers are not told how this rule can be used to benefit a claimant whose joint tenant has left the property and is not making any contribution. Instead, the guidance simply gives a simplified version of the legislation.7
In the second case, a different problem presents itself. Here, the claimant is not legally liable to pay the rent even though s/he needs to do so in order to be permitted to occupy. Fortunately, Schedule 2 paragraph 2 to the UC Regulations provides for a person to be treated as liable where the person who is liable is not paying, the claimant has to pay to remain in occupation, it would be unreasonable for her/him tomake other arrangements and it is reasonable in all the circumstances to treat her/him as liable.
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- 1. Reg 5 The Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Decisions and Appeals) Regulations 2013 No. 381 (‘UC etc Decision and Appeals Regs’)
- 2. R (CJ) and SG v SSWP (ESA)  UKUT 324 (AAC)
- 3. R(IB) 2/04
- 4. Reg 35 and Sch 1 para 21 UC etc Decisions and Appeals Regs 5 The Universal Credit (Claims and Payments) (Scotland)
- 5. The Universal Credit (Claims and Payments) (Scotland) Regulations 2017 No.227. The request may be refused if an MPTL is already in place.
- 6. Reg 60 and Sch 6 para 7 UC etc. Claims and Payments Regs 7 See para F3267
- 7. See para F3267