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Universal Credit

A COMPLETE GUIDE TO UNIVERSAL CREDIT

1. Introduction

This document provides private and social sector landlords with information about Universal Credit to help them understand what they can do to help their tenants prepare for:

  • Their move to the single Universal Credit benefit payment
  • Making direct payments of their housing costs (rent) direct to their landlord themselves

It explains how Universal Credit will ensure that the appropriate protections and safeguards are in place – both the trigger points for intervention by the Department for Work and Pensions (DWP) and recovery of arrears where they occur.

It also explains what budgeting and payment support is available for tenants who may need help moving to the new system.

This includes alternative payment arrangements if claimants are finding it hard to manage their Universal Credit payment and pay their landlord themselves.

There are 2 types of Universal Credit services:

  • Universal Credit full service
  • Universal Credit live service

1.1 Universal Credit full service

Universal Credit full service is available to all types of claimants in Great Britain.

Universal Credit full service claimants will have an online Universal Credit account to manage their claim. They will use their account to report changes, send messages to their work coach and find support.

1.2 Universal Credit live service

Universal Credit live service claimants will manage their claim by phone.

Live service claims will eventually move to the full service. Universal Credit live service claimants will be notified when this will happen and what they need to do at that time.

To successfully transfer claimants to the full service, claimants must re–declare their housing costs. For claimants in Social Rented Sector properties the landlord will need to re verify their housing costs for payment to continue.

2. Universal Credit payments and helping tenants prepare

2.1 Universal Credit payments

In most cases Universal Credit will be a single, monthly payment which is paid in arrears directly into the claimant’s bank account. Payments will include all eligible housing costs.

This means that claimants will be responsible for paying their rent themselves.

Couples living in the same household will get one monthly payment between them, this can be paid into a joint account or a single account in either person’s name.

Any other adults living in the same household who are claiming Universal Credit will be paid separately.

2.2 Help with housing costs under Universal Credit

Universal Credit payments are made up of different amounts depending on the claimant’s individual circumstances.

The Universal Credit additional amount for housing cost payment helps tenants with their eligible rent and service charge costs. Regulations state that claimants must satisfy 3 conditions – payment, liability and occupation – to qualify for help with their housing costs.

If a claimant lives in temporary accommodation because the local council placed the claimant there due to homelessness, or they live in specified (supported) housing, a claimant will still need to claim Housing Benefit for help with housing costs. They should contact their local council to apply for Housing Benefit.

In the majority of cases DWP will pay eligible housing costs directly to the claimant as part of the single Universal Credit payment.

2.3 Private sector tenants

For private sector tenants, their Universal Credit additional amount for housing costs will be whichever is lower out of their actual costs or the Local Housing Allowance rate.

2.4 Social sector tenants

For social sector tenants, their Universal Credit additional amount for housing costs will be their actual housing costs. This cannot include service charges that are not covered by Universal Credit or charges for utilities, such as water or electricity.

If a social sector tenant claimant has any under occupied bedrooms, their additional amount for housing costs will be reduced by:

  • 14% for one spare bedroom
  • 25% for two or more spare bedrooms

2.5 Protection for social and private sector landlords

There will be improved protection in place for landlords and tenants against arrears under Universal Credit.

In the legacy benefit systems, such as Jobseeker’s Allowance (JSA) and Employment and Support Allowance (ESA), many landlords in the social rented sector receive their housing cost payments directly from their local council.

Universal Credit will be a single, monthly payment (including eligible housing costs) paid directly to claimants.

Social landlords may need to look at how and when they collect their rent, and the level of support some tenants will need to make the transition to a single, direct monthly payment.

As a landlord, you can get ready for Universal Credit by:

  • Familiarising yourself with the changes
  • Considering how you might need to adapt your policies and processes
  • Engaging with your tenants early, to start assessing their needs, making sure they understand their responsibilities and the support available

Most private sector landlords won’t see any change with the introduction of Universal Credit.

This is because most working age claimants in the private rented sector are already used to receiving their Housing Benefit or Local Housing Allowance payments directly and are responsible for paying their rent to their landlord.

DWP encourages those private sector landlords who currently receive a managed payment from the local council to familiarise themselves with the changes and look at how they can prepare themselves.

Get local information and advice by contacting your regional partner manager for specific advice and guidance   .

Providers of supported exempt accommodation and temporary accommodation won’t see any change as their residents will have help with their housing costs provided separately to Universal Credit, and will be able to continue to receive Housing Benefit.

2.6 Helping tenants prepare for Universal Credit

Landlords can help tenants to get ready for Universal Credit by encouraging them to:

Universal Credit is designed to be claimed online, if the tenants don’t have access to the internet or are not confident using a computer, the jobcentre can tell them about local services that can help.

Universal Credit will usually be paid monthly in arrears into a single account, so setting up a direct debit or standing order may help them to do this.

All claimants receive the Universal Credit and you guide when they make a Universal Credit claim to help support them through the changes. You can use this as a basis for conversations with tenants.

2.7 Support to help tenants with budgeting

A number of safeguards are in place to support tenants and help them manage their money. Budgeting support will be offered when claimants first receive Universal Credit.

This support can be money advice or, depending on their individual circumstances, an advance of benefit.

A claimant can ask for a Universal Credit new claim advance if they’re in financial need and can’t manage until their first monthly payment of Universal Credit. This will be a proportion of the full payment and will be recovered over a period of time.

Alternative payment arrangements will be available in some circumstances for claimants who genuinely can’t manage their monthly payment.

This might mean having a managed payment made to their landlord, a split payment, or a more frequent payment.

Information about how Universal Credit is calculated.

3. Paying rent

3.1 Ensuring that rent is paid

Claimants will be expected, where possible, to arrange their own rent payments as they would if they were in full-time work.

Landlords need to think about how this will fit with their own payment calendars. If landlords have previously received a managed rent payment from the local council, they will need to speak to their tenants to agree arrangements for collecting rent from them.

In a minority of cases, alternative payment arrangements can be put in place to support claimants.

3.2 First Universal Credit payment

Universal Credit is assessed monthly and paid monthly in arrears. The first payment will usually be received 1 month and 7 days after they submit their claim.

Housing Benefit will normally stop when the Universal Credit claim is approved. The claimant doesn’t need to tell their local council that they’re moving to Universal Credit.

If they received Housing Benefit up to the date they applied for Universal Credit, their Housing Benefit will continue for the first 2 weeks for their new Universal Credit claim. In most cases, they do not need to contact their local council about this and the payment will be paid automatically. If they have moved home, they will need to contact the local council who paid Housing Benefit to make sure they have the correct details to make the payment.

If a claimant lives in temporary accommodation because the local council placed the claimant there due to homelessness, or they live in specified (supported) housing, a claimant will still need to claim Housing Benefit for help with housing costs. They should contact their local council to apply for Housing Benefit.

3.3 Paying rent while waiting for their first payment of Universal Credit

Many new claimants of Universal Credit will be coming from work and will be able to support themselves in the first month using their final payment of earnings.

However, where needed, a claimant can ask for a Universal Credit new claim advance if they’re in financial need and can’t manage until their first monthly payment of Universal Credit.

4. Evidence requirements and checking claims

4.1 DWP checks on rent and tenancies under Universal Credit

The claimant will be asked to give details of their housing costs and in some cases will be asked to provide evidence to support their Universal Credit claim. They may be asked for proof of current rent liability, payment of rent and occupancy.

In the Universal Credit live service, if a private or social sector tenant isn’t able to supply the appropriate evidence DWP will send a form to the landlord asking them to give details of the tenant’s housing costs.

In the Universal Credit full service, where a social sector landlord is on the Landlord Portal, the process is automated.

This means rent is verified through the portal by the landlord. If the landlord is not on the Landlord Portal, DWP will send a form to the landlord asking them to verify the tenant’s housing costs.

In the Universal Credit full service, if a private sector tenant hasn’t provided all the information required, DWP will contact them. If they don’t have a tenancy agreement which shows the current rent, a letter from the landlord or letting agent is acceptable.

4.2 Changes that might affect a Universal Credit payment

Claimants are responsible for telling DWP of any changes that might affect their Universal Credit payment. This includes things like annual rent changes, changes to eligible service charges or separating from a partner.

4.3 Notifying landlords that tenants are claiming Universal Credit

If you’re a social landlord and have a tenant receiving Universal Credit live service and your tenant has made a claim for Universal Credit, you’ll be notified by either a:

  • UC179 form – notification to social landlord of a claim for Universal Credit
  • UC182 form – verification of housing costs, this is issued to a social landlord if a tenant claims Universal Credit but fails to produce sufficient evidence to verify their housing costs

If you’re a social landlord and have a tenant receiving Universal Credit full service as part of the Universal Credit full service housing costs verification process, a form is sent to the claimant’s social rented sector landlord asking for housing cost details. This is also the notification that a claim has been made.

This is in line with the Social Security (Information Sharing in Relation to Welfare Services etc – Amendment) Regulations 2015 that will enable the sharing of limited relevant information with social landlords.

The supply of information and its appropriate use is governed by the requirements of the Data Protection Act. Social landlords will have an obligation only to use the information supplied by DWP for its specific intended purposes.

DWP does not inform private landlords that their tenant has made a claim for Universal Credit.

4.4 DWP details not matching the tenant

In the Universal Credit live service, if the details provided by DWP do not match those of your tenant, you can email [email protected] to let them know as soon as possible.

DWP will investigate any anomalies in the information supplied.

In the Universal Credit full service, if the details do not match, a social rented tenant will receive an automated to-do via their online account and will be asked if they agree with the details their landlord has provided. If the tenant does not clear this to do, housing costs cannot be paid.

If a private rented tenant’s information doesn’t match that provided by the landlord, they will be asked via their online account to provide further evidence to resolve the mismatch.

5. Calculating rent

5.1 Calculating monthly rent if a claimant’s rent is paid weekly

Universal Credit will be paid monthly. If rent is paid weekly, the monthly rate will be worked out by multiplying the weekly rent by 52, then dividing by 12.

5.2 Other rent payment frequencies

Other payment frequencies will be calculated as follows:

  • 4 weekly payments are multiplied by 13 and divided by 12
  • 3 monthly payments are multiplied by 4 and divided by 12
  • annual payments are divided by 12

5.3 52 week years

Universal Credit will always be calculated based on a 52 week year, unless rent is charged over fewer than 52 weeks.

5.4 Rent-free weeks

If rent is charged over fewer than 52 weeks, the monthly payment will be worked out based on the number of weeks rent is charged.

For example, if rent is payable 48 weeks of the year, Universal Credit will be calculated as weekly rent multiplied by 48 and divided by 12.

Tenants should be made aware of any rent free weeks they may be entitled to so that they can notify DWP, this will help to avoid confusion and ensure payments are accurate.

6. Paying for 2 homes

6.1 Universal Credit payments for 2 homes

Support through Universal Credit can be paid on 2 homes if:

  • Liability for 2 homes has risen because of fear of violence in the normal home – in this case, both liabilities can be paid for up to 12 months as long as there is an intention to return to the original property
  • a disabled person can’t move into a new home because it needs adaptations – in this case the claimant must show that the delay is reasonable and if so, both liabilities can be paid for up to 1 month

Multiple homes can be treated as a single home, for benefit purposes, where a family has been housed in 2 homes because of the size of the family. This is not time-bound.

The Universal Credit additional amount for housing costs can also be paid where someone is not able to occupy their home because of essential repairs, but will only cover either the housing costs of the other accommodation or the accommodation which they normally occupy as their home (not both).

If someone cannot move into accommodation immediately because they are in hospital or a care home, then the Universal Credit additional amount for housing costs can be paid on the new accommodation for up to 1 month.

7. Service charges

7.1 Universal Credit and service charges

Any eligible service charges will be paid directly to tenants as part of the Universal Credit additional amount for housing costs payment.

More information about Universal Credit service charges – guidance for landlords.

7.2 Ensuring tenants are aware of what service charges are eligible for Universal Credit

Landlords in the social rented sector are responsible for clearly setting out to the tenant which of their service charges are eligible, in accordance with the eligible service charges, regulations and guidance. The claimant will report this as part of their claim.

In the private rented sector, a tenant’s total rent is usually made up of both rent and service charges, which are not separately identifiable.

DWP will not need to collect separate service charge information for the private rented sector group as DWP will pay the lesser of the total rent or the appropriate Local Housing Allowance.

8. Support and alternative payment arrangements

8.1 Alternative payment arrangements and managing rent arrears

If a tenant gets into difficulty paying their rent, the landlord can apply for an alternative payment arrangement (APA) managed payment to landlord (MPTL) which will be considered on a case by case basis.

More detailed information about personal budgeting support and alternative payment arrangements.

8.2 Tenant in rent arrears

Information from third parties such as family members, support workers and the claimant’s landlord, can be considered when assessing a claimant’s ability to manage their finances.

Personal budgeting support, and/or an alternative payment arrangement, may be deemed appropriate for those claimants who are not yet in arrears with their rent but who may benefit from advice around managing their Universal Credit award or money management.

DWP can refer the claimant to personal budgeting support and/or consider an alternative payment arrangement.

8.3 Applying to have the rent paid to landlord (managed payment to landlord alternative payment arrangement)

If you have a tenant receiving Universal Credit you can apply for a managed payment to landlord (MPTL) using the UC47 request forms.

More detailed information about personal budgeting support and alternative payment arrangements.

If you’re a social landlord you can also apply for a MPTL as part of the housing costs verification process, either by using the form Universal Credit sends to request housing cost details, or by completing the UC47.

Once the application has been processed the landlord will be advised of the decision. If the application is refused DWP won’t tell you the reason why. This is because of data sharing regulations and claimant confidentiality.

The amount you receive may change from month to month depending on the claimant’s Universal Credit award, usually up to a maximum value of the eligible housing costs.

DWP will notify when the MPTL ceases, but we won’t tell you the reason why. This is because of data sharing regulations and claimant confidentiality.

If you’re a private Landlord and you are applying for a MPTL due to rent arrears you will need to complete the non-secure UC47. If you are applying for a MPTL due another tier one or tier two factors only, you will need to complete the secure version of the UC47 form and explain your reasons in the additional information box.

The secure version of the UC47 can be found by selecting yes to the question ‘Does your email address contain any of the following?’ You must then post the form to us once completed if you do not have a secure email address.

8.4 How DWP pay the managed payment to a landlord

Social landlords

For social landlords who have a tenant getting Universal Credit live service, a Bank Automated Clearing System (BACS) payment will be paid into the bank account nominated by the landlord at the end of the claimants Universal Credit assessment period on a monthly basis.

The tenant’s reference number and National Insurance number will be used as the BACS identifier and will appear on the transaction with the National Insurance number and 10 characters of the tenant’s reference number in the following format: AB123451234567890.

If a tenant reference of more than 10 characters is used, then the transaction and payment schedule will only include the first 10 characters of the reference.

For social landlords who have a tenant getting Universal Credit full service the third party deductions (TPD) scheme will be used to pay the alternative payment arrangement (APA) managed payment to landlord (MPTL).

Payments from the TPD scheme are paid 4 weeks in arrears every 28 days. The 28 day TPD payment cycle equates to 13 payments in a calendar year.

Universal Credit payments are paid calendar monthly and equate to 12 assessment periods each year. This means:

  • DWP will assess what deductions (for example, APA MPTL) can be made from Universal Credit payments 12 times each year at the end of each assessment period
  • The APA MPTL is paid in the TPD payment cycle following a Universal Credit payment
  • When a TPD payment cycle ends before DWP assess what deductions can be made from a Universal Credit payment, then any APA MPTL payment will be paid in the next TPD payment cycle
  • 12 APA MPTL will be paid in 12 of the 13 TPD payment cycles

The first APA MPTL payment from the third party payments system is normally received within 6 to 8 weeks from the date deductions commence, for example, from the end of the assessment period in which managed payments commenced.

The MPTL APA is paid on the same day that landlords normally receive any third party rent arrears deductions and will be paid into the bank account nominated by the landlord.

If you have multiple properties with MPTLs, then you will receive a single aggregated payment for all your tenants on a 28 day cycle and a schedule will be sent to you with a breakdown of all payments.

For Universal Credit full service tenants DWP will use the landlord’s creditor reference number to pay both rent arrears and the managed payment APA to the landlord.

Payments will be shown as individual transactions, and will include an identifier to show whether the payment relates to rent arrears (RA) or APA (MPTL) payment. A remittance note will be sent to the landlord which shows how the payments have been broken down.

When a managed payment APA or rent arrears deduction is paid through third party deductions, their claimant/tenant reference number will be annotated at the end with either:

  • RA for rent arrears payments
  • MP for managed payment

The claimant or tenant reference number shown on the third party payment schedule are 18 characters.

To help with identification of the 2 types of payments, the tenant reference number is 16 characters long, allowing for the RA or MP suffix.

If you have any queries relating to your third party payment schedule you can contact the third party payments contact centre.

Third party contact centre

Telephone number: 0800 328 0128
(Monday to Friday, 8am to 6pm)

Private landlords

For private landlords, a Bank Automated Clearing System (BACS) payment will be paid into the bank account nominated by the landlord at the end of the claimants Universal Credit assessment period on a monthly basis.

The tenant’s reference number and National Insurance number will be used as the BACS identifier and will appear on the transaction with the National Insurance number and 10 characters of the tenant’s reference number in the following format: AB123451234567890.

If a tenant reference of more than 10 characters is used, then the transaction and payment schedule will only include the first 10 characters of the reference.

8.5 Enquiring about a managed payment

If you have a tenant receiving Universal Credit live service

Questions, queries or non-compliance issues about a specific live service case from a local council, landlord or third party acting on behalf of a claimant can be raised directly with the Universal Credit service centre by:

This email address is for use by landlords to escalate issues related to APAs and rent arrears payments.

If there is a threat of eviction, landlords are asked to note the subject field accordingly – ‘Potential Eviction’. It must not be used for new APA requests, or for raising any other issues.

Enquiries noted as potential eviction will be cleared within 24 hours. All other enquiries will be cleared within 5 days.

Advice about what information DWP can disclose to landlords about their tenants can be found in the document, Universal Credit: housing costs and disclosure.

If you have a tenant receiving Universal Credit full service

In the first instance the landlord should engage with their tenant about the issue.

The tenant has access to their own information via their online account. They can share the information from their account with their landlord, or other representative if they wish to as this contains information about housing payments made.

If more assistance is required, the claimant can ask through their journal, face to face or call the service centre and provide explicit consent to share their personal information with their landlord or other representative.

When contacting Universal Credit the claimant’s representative will be asked to confirm their identity so the case manager can speak to the landlord direct.

If you are unable to engage with your tenant, you can contact the following number 0800 328 5644.

If you have any more questions, contact your regional partner manager.

You can provide feedback on the service you have received by using the online complaints service.

Although the portal home page refers to JSA and Universal Credit customers, there is an agreement that landlords can also use the portal to comment or make a complaint.

8.6 Changes which may affect the managed payment to landlord (MPTLAPA

When a claimant changes address the MPTL APA will cease from the end of the assessment period before the claimant changed address.

Universal Credit can only make deductions in respect of rent arrears for a debt owed on the claimant’s current address. If the claimant changes address any deductions being made will cease. A notification will be sent to the landlord where the Managed Payment has ended.

Whilst a MPTL is in effect the landlord must notify the department of any changes which a landlord can be reasonably expected to know which might affect the claimant’s entitlement to:

  • Universal Credit
  • the amount of Universal Credit awarded
  • the continued payment of Universal Credit

If the MPTL is overpaid due to a change that has not been reported by either the claimant or the landlord, the landlord may be asked to repay the overpaid benefit.

8.7 More frequent payment alternative payment arrangement – paying Universal Credit more frequently than once a month

More frequent payments are one of the options that will be considered if a claimant is having difficulty budgeting. The claimant should contact DWP to be considered for an alternative payment arrangement.

They will also be offered personal budgeting support money advice.

More detailed information about personal budgeting support and alternative payment arrangements.

9. Recovering rent arrears from a Universal Credit claim

Arrears of rent and service charges for the property the tenant is currently living in are included in the list of deductions that can be made from a Universal Credit payment.

If your tenant has accrued rent arrears to the value of 2 month’s rent or more, you can request a managed payment or rent arrears deduction.

The maximum rate at which deductions for rent arrears can be made is 20% of the Universal Credit standard amount.

The rate used will depend on the claimant’s circumstances. Only the claimant can request a change to the percentage rate by contacting Universal Credit.

9.1 How DWP will pay rent arrears deductions to the landlord

If approved, rent arrears deductions will be paid under the third party deduction (TPD) scheme.

Once payments are set up on the third party payments system, you will normally receive payment every 28 days and will be 28 days in arrears.

The payment will appear as a single transaction on your bank statement along with a reference number (settlement number), you will then receive a third party deductions schedule with a breakdown of all the individual transactions which make up that payment and their associated references.

The first payment is normally received within 6 weeks from the date deductions commence.

A Bank Automated Clearing System (BACS) payment will be paid into the bank account nominated by the landlord.

More guidance for creditors and suppliers receiving a third party payment.

A third party payment schedule will be sent to you with a breakdown of rent arrears payments. Payment schedules are issued by post unless you are set up to receive electronic schedules.

For details of how to receive payment schedules, an information pack or further information about electronic schedules (EDI) email: [email protected]

Get local information and advice by contacting your regional partner manager.

10. Budgeting support

10.1 Budgeting support available from DWP

Personal budgeting support can be offered to anyone claiming Universal Credit. Claimants needing help with monthly budgeting will be identified through conversations with their Universal Credit work coach or by others providing support.

Many claimants will be able to help themselves through the online budgeting support services that are already available via their Universal Credit account.

Universal Credit has made funding available to local councils and partners to ensure that face-to-face budgeting support is available locally to help the most vulnerable.

All claimants who have need of an alternative payment arrangement will be offered personal budgeting support money advice.

Landlords should make themselves aware of the local personal budgeting support money advice providers. The local authority (LA) revenues and benefits team or DWPregional partnership manager can provide this information.

More information on budgeting support if you live in rented accommodation (or if you have tenants) can be found on the Money Advice Service website.

They have an online money manager support tool which provides free and impartial budgeting information and advice based on your (or your tenants’) personal circumstances.

11. Discretionary housing payments

Universal Credit claimants can contact their local council and apply for a discretionary housing payment.

This payment gives the claimant additional financial support so that they can meet a rent shortfall or other housing costs. The decision on whether to award a discretionary housing payment rests with the local council.

12. Specialist accommodation needs

12.1 Universal Credit and supported housing

Residents of supported exempt accommodation will have help with their housing costs provided separately to Universal Credit and will be able to continue to receive Housing Benefit in the short term.

DWP, working with DCLG are developing a localised top-up scheme to meet the needs of supported housing providers and their tenants from April 2019.

12.2 Universal Credit and temporary accommodation

Universal Credit live service claimants living in temporary accommodation are prevented from claiming Universal Credit in the live service areas by the legislative gateway and so will need to claim other benefits.

Full service claimants on Universal Credit entering temporary accommodation (not just emergency temporary accommodation) after 11 April 2018 will make a claim for Housing Benefit.

From 11 April 2018 any person already in temporary accommodation and making a new claim for Universal Credit will continue to have their housing costs met through Housing Benefit and will not receive the Universal Credit housing element.