Universal Credit recipients to be given direct landlord payment option
The Scottish Government plans to use its new social security powers for the first time to increase the frequency of Universal Credit payments and offer to pay housing benefits direct to landlords.
While Universal Credit itself remains reserved, ministers will use new powers to give claimants the option to be paid fortnightly instead of monthly.
And, in a new move, social security minister Jeane Freeman has announced the government also plans to offer tenants in the private rented sector as well as those in social housing the option to pay housing benefits direct to landlords rather than via claimants.
The use of new flexibilities around Universal Credit payments – the benefit remains reserved – marks the first use of new social security powers under the Scotland Act 2016, with a consultation to be launched later this month on the necessary regulations.
New applicants who live in Full Service areas – local authority areas where a digital claiming system has been established by the UK government – will be given the option of twice-monthly payments instead of the DWP’s current monthly payment system.
Holyrood is taking on a series of newly-devolved welfare powers, from personal independence payments to carer’s allowances. A new social security agency is being set up and a Social Security Bill is set to be introduced this year.
Ms Freeman said: “As part of the social security consultation exercise last summer, we heard direct from people that paying the housing element of Universal Credit direct to landlords and receiving more frequent payments would be two important improvements to the DWP approach.
“These are issues that people have repeatedly raised with us, highlighting the problems the current system can cause for budgeting.
“I am delighted, therefore, that I am able to address these concerns and go further, by extending the direct payment option to tenants with private landlords, and deliver these flexibilities for people in Scotland.
“People claiming Universal Credit want to have a choice about how the housing element part of the payment is paid - we have listened to that wish and are now taking action to make sure it happens as quickly as possible.”
Ms Freeman said another consultation will be carried out in the coming weeks to gather views on the draft regulations.
John Blackwood, chief executive of Scottish Association of Landlords, welcomed the option of direct payments to landlords.
He said: “This should help protect tenancies and minimise rent arrears which will benefit both the tenant and the landlord. It is only fair that private sector tenants have the same option to choose direct payments as tenants in the social sector.”
However, Scottish Conservative MSP Annie Wells pointed to the fact the transition of some benefits could take until 2020 to complete, saying she wanted the Scottish Government to use more of its powers.
She told the BBC: “I welcome the fact the UK government has given the Scottish Government these powers. However, the Scottish Government has now shown that they’ll only use a small portion of the powers devolved through the Scotland Act. I want to see them use more of the powers.
“They’ve asked for a hold-off for three years to take all these powers on board. It’s alright complaining and not governing, but we need to see them actually governing and using the powers they were given.”
Labour’s Iain Gray welcomed the changes, but also highlighted that Westminster will continue to administer some devolved benefits for some time.
He said: “While I welcome the intention to use this little bit of the welfare power which was devolved through Smith, we have this situation where the Scottish Government have delayed taking on the powers over most benefits for three years, and we’re not very sure about when the flexibility they’ve talked about is going to come in.”
Meanwhile, Scottish Greens social security spokeswoman, Alison Johnstone, said the rollout of Universal Credit was “clearly causing serious problems” in parts of Scotland.
She said: “We look forward to seeing the Scottish Government’s plans for use of its ‘new flexibilities’ on Universal Credit in more detail because it’s becoming increasingly clear that the DWP remains unlikely to improve how it operates.
“The changes the Scottish Government propose are welcome and will make life easier for people receiving Universal Credit. It’s important we make the most of every power coming our way.”