Direct payment to landlords and third party deductions – universal credit
Of particular concern to landlords and letting agents about the welfare reforms is whether direct payment to a landlord will be possible under the new rules. There has been much scaremongering and rumour on this particular topic.
In the previous section, payment to a third party on behalf of a claimant was considered but concluded that it’s probably not suitable for direct payments to landlords.
However, regulation 60 The Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Claims and Payments) Regulations 2013 contains a further direct payment provision:
… deductions may be made from benefit and direct payments may be made to third parties on behalf of a claimant in accordance with the provisions of Schedule 6 …
Schedule 6 contains details about what deductions can be made from universal credit and payable to whom.
Adrian, what do you make of paragraph 7(5) which appears to limit the deduction relating to rent to 5% of the standard allowance?
I’m not sure I’m afraid. However, the previous regulations specifically allow up to a maximum of 8 x 5% to be deducted where the debt relates to rent. Sub-paragraph (5) to which you refer only applies to “… such cases and circumstances as the Secretary of State may determine …” but I don’t know what those cases are at this stage.
These things often need reading several times (which I’ve not yet done) to fully absorb all the different permutations.
Guild of Residential Landlords