Response – Rent arrears deductions

By: Zorana Halpin
Published: April 2014

Shelter response – Rent arrears deductions in Universal Credit

We recognise that tenants must pay rent fully and on time. Timely rent payments and effective rent repayment measures reassure landlords of reliable income streams and help maintain tenancies.

However, the Department of Work and Pensions' (DWP) proposal to directly deduct 40% from core benefits when a household enters arrears amounts to a punitive and unsustainable squeeze on household finances, which we do not support.

A punitive and damaging repayment system leading to further reliance and debt is not a proportional response to arrears.

Mandation should be balanced with manageability, rather than punishment.

Preventing debts, rather than worsening debts, must be a priority.

When tenants enter arrears, after four weeks an assessment must take place, with direct payments switched over to managed payments to landlord if appropriate. Where claimants can manage repayments in addition to the 5% direct deduction currently in place, voluntary repayment arrangements should be established between the claimant and landlord.

This approach will reassure landlords that tenants will repay arrears without the risk of tenants entering unmanageable debts and hardship.