One of the worries about the new Universal Credit currently being rolled out in phases is direct payment to landlords.
Although it looks like direct payment will be possible in much the same way as is currently available (where a certain amount of arrears are reached such as 2 months), it seems credit unions maybe a suitable option for landlords wanting direct payment.
A tenant can sign up with a credit union account and If housing benefit (or Universal Credit) is paid into the account, that money can be ring fenced by the credit union and paid direct to the landlord. If the tenant requests the payments no longer go to the landlord, the tenant will have to give a period of notice (usually around a months notice) and the landlord will be informed by the credit union that such a request has been made. This gives the landlord some opportunity to take (fairly limited) action.
The Universal Credit (Transitional Provisions) and Housing Benefit (Amendment) Regulations 2013 makes a few changes to The Universal Credit (Transitional Provisions) Regulations 2013. One of the changes of particular interest is that it amends the Universal Credit regulations to allow Universal Credit to be paid to persons who have a current account with a credit union as distinct from a bank. This is a further step which should allow landlords to be paid the housing element of universal credit direct albeit via a back door route. The new provisions come into force on 28th October 2013.