New DWP proposal will trap people in their homes, and in debt.

New DWP proposals to protect landlords’ rental incomes are in danger of trapping people in their homes, creating a modern day version of a debtor’s prison.  

Last year Lord Freud committed to protecting landlords’ rental incomes under Universal Credit.  To do this, DWP propose that tenants in rent arrears have 40% of their core benefits deducted until rent arrears are cleared – that’s 40% taken from JSA, Income Support or  Standard Allowance under Universal Credit.

DWP have not put forward a rationale for the 40% rate.

But the 40% rate should definitely ring a bell, because it’s the same punishing rate people are sanctioned by if Jobcentre Plus decide they aren’t trying hard enough to get a job. So is it the case that people in rent arrears simply aren’t trying hard enough to pay their rent?

Housing benefit claimants hit by the bedroom tax are expected to make up the shortfall from other income, but with JSA just £72 a week for a single claimant, this is a genuine struggle.  Half of those hit by the bedroom tax are now in rent arrears.

People also move into arrears because of the welfare system’s inefficiency – many of the rent arrears cases Shelter see at the court desks are caused by housing benefit delays.

The proposed debt rules will take no account of household circumstance, which is risky both for the household and the landlord.

A parent with one child, in rent arrears because of the bedroom tax will be subject to an automatic £23 per week deduction until they have cleared their arrears. This will be on top of the £14 per week they are expected to pay for towards their rent due to the bedroom tax. After making their rent top up they will be left with around £100 to cover gas, electricity, food, travel costs, clothes and council tax.

If they struggle to pay their rent top-up to their landlord they risk more arrears and being evicted.

If they struggle to manage any personally arranged debts – like doorstep loans or credit card debt – things will be close to impossible.

New debts could be racked up as households borrow more.

No doubt families will try and maintain their fragile grip by minimising costs.

Things could be so tight that any additional costs will be avoided. Families will have to stay at home, with the only regular trip out being a visit to the local foodbank. Even paying bus fare to attend an interview may become difficult.

Clearly, our response to DWP is that we do not support a policy which perpetuates cycles of debt, leaving households trapped, with nowhere to go.

So what should they be doing?

Firstly, DWP should keep the existing 5% repayment rule in place. It’s a reasonable approximation of what is affordable for all and a demonstration to landlords that arrears will be repaid.

Secondly, DWP should also send a message that if tenants can afford to repay more they should enter voluntary repayments with their landlord.

More also needs to be done to prevent arrears building up:  

  • DWP have committed to reviewing a claimants’ circumstances once they hit 4 weeks arrears and this should be used to carry out a robust assessment to understand why the tenant is in arrears. 
  • If appropriate a tenant should be moved on to Alternative Payment Arrangements, guaranteeing housing benefit goes direct to landlord.
  • Tenants should also are referred for Discretionary Housing Payments and budgeting advice to stop arrears building up again.

The proposed debt rules send an alarming signal about life under Universal Credit.

If we want people to flourish under Universal Credit, preventing debts not worsening debts must be the priority.

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18 Comments
  1. The intention by the DWP and the Coalition is of course to punish the poor for being poor and not to try to help them.

  2. Not a day goes by that I don’t think, these evil ‘people’ can’t possibly make people suffer any more and every day I’m proved wrong. How much money do these greedy capitalist bastards need?

  3. The Nazis seemed to have more empathy than this disgusting coalition. Surely these are crimes the UN should be pursuing against this backward, mentally ill country

    1. at least they put a bullet in the back of the head, so much kinder

  4. One word ‘Yanks’ (who are behind this).

  5. This sanction law im surprised there isnt a rise in crime mental health what about the ones who missed appointments last year and only sanctioned this year wat is they have a flat and aren’t lucky to have a family to help them and payment meters for gas and eletric but mo money to put in thry cant cook not heating no hot water wjat are they meant to do they become homeless cant go to a hostel as they have mo momey to pay the top up rent there

  6. This is shocking stuff. I worked out, per week, just £28 to spend (although my maths is not my strongest point) but £28 per week to support a family is cruel and unrealistic.

    No doubt life for people unemployed and even the most vulnerable in society will find living any meaningful life is now unimaginable within their means and coupled with some public hostility towards benefit claimants, the welfare state is now an act of punishment, not a source of help and support.

    By the way, just who was responsible for the economic crisis in 2008?

  7. Under current civil law it is possible to ask for promissory estoppel, if money is owed to a creditor, the requirment in law is that it can only be used a ‘shield’ and not a ‘sword’ the court will have an obligation to take all your personal circumstances into account in reaching a decision. I hope that this helps people in these circumstances

  8. It seems pretty obvious to me that the 40% rate is to cover the imagined undeclared earnings, which they assume are being made by everyone on benefits. After all this is their ideal Highest Rate of Tax for their Millionaire Bankers and other friends, who believe that their personal greed is good for the country.

    So for every million normal persons they can screw they can help one of their rich millionaire supporters pay less tax.

    But it is a direct violation of our Human Rights which have been ‘legally binding’ on the State from 1976, and long before the Human Rights Act (which didn’t even consider those rights) “entered into force”.

    So if you want to support other campaigns to have this confirmed by the UK & the UN please do so here:-

    1. http://you.38degrees.org.uk/p/bill-of-rights and

    2.http://www.avaaz.org/en/petition/General_Assembly_of_The_United_Nations_Confirm_the_relevance_of_The_International_Bill_of_Human_Rights_to_all

    Please spread the word and tweet the Pope to see what he thinks.

  9. and the coalitions mantra is we are doing the right thing to get people back into work we spend ££££ on welfare benefits and we have to ensure nobody receives more on benefits than hard working people and there are more people in paid employment since blah blah blah

  10. I am trapped now even though I have a decent job; following a period of 3 mths unemployment last year and a few mths previous year, and housing ben dept not paying from date of beginning of unemployment and council tax arrears cos they cant deal with change, I am in debt and now have a bad credit rating thanks to them. So I could afford to buy or rent a better place, but of course one has to pay for credit checks and I wont pass one or be given a mortgage. Council has stuffed up my life

  11. In 2008, Labour changed the housing benefit system for private landlords, where the landlord no longer receives the rent directly, it first goes to the tenants, who can’t manage their finances and spend their money other things.

    There are lots of fed up Landlords, who simply don’t want to take on tenants on housing benefit, because the rent is n’t been paid.

    Whilst at the same time, housing association and council get their payment directly.

    Labour saw this an a way of fleecing from private landlords. It was a vote winner. To add insult to injury, they claimed housing benefit is costing the country billions.

    “To do this, DWP propose that tenants in rent arrears have 40% of their core benefits deducted until rent arrears are cleared”

    Why put tenants in debts in the first place? Why not revert to the previous situation, where landlords where getting rent directly?.

    1. I Have a tenant that has a top up to pay of a £166 a month , And i am not getting it , but in there household they rent from me they have Skye ,I pads , Plus out spending every week on clothes etc and one of them is in the pub drinking every day and they are on benefits from the state, So arnt i entitled to getting my rent topped up? As the signed the Agreement and said they can afford it? So who is taking the mickey me as a landlord or the tenant?

      1. You should’nt be poking your greedy nose into someone elses life in the first place. Why are you even posting here, this is nothing to do with what you are talking about.
        Big deal they have ipads and sky (In your privacy violating analysis). Who doesn’t? That is affordable now, the cost of living ISN’T. Who are you to judge? Horrible person.

  12. Landlords are all greedy idiots who have totally missed the point and start punishing the tenants.

  13. I have just been made unemployed due to a restructure which took away my temp to perm role. I live alone and rent privately. I have just had my HB/CT confirmed and the monthly amount I have to top up amounts to what I get paid on JSA. Therefore, I am receiving minus zero income. I have paid into the system since 1974, so how does this seem fair? I am beside myself with worry as I only have a few hundred pounds savings and this will disappear after one month of topping up my rent and paying council tax, bills etc I will be forced to work below my minimum rate of affordability and probably get into debt as a result. I never thought I would be in this situation at 56 years of age.

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