Earlier this year, the Department for Work and Pensions (DWP) proposed to ramp up debt collection from struggling renters.
Collecting rent arrears from people on housing benefit has long been a problem, as housing benefit quite rightly only covers the actual rent, not any arrears that have built up. But as people on housing benefit, by definition, have little spare cash, courts have the power to divert a proportion of a renter’s non-housing benefits to the landlord to pay off the arrears over time, sparing the renter from eviction. Of course, these core benefits are not exactly huge either, so the total amount that could be diverted in this way was limited to 5%, to allow renters sufficient income to survive while the arrears are paid off.
So it was a bit of a shock when DWP proposed raising this figure to 40% of renters’ core benefits – that’s 40% that could be taken from JSA, Income Support or the new Standard Allowance under Universal Credit.
Though Shelter have long argued that adequate protections are needed to prevent rent arrears leading to eviction, we could not accept the policy DWP put on the table.
There was no justification from DWP for the 40% rate, no explanation why people needed to be left in excruciating hardship. It was a blunt tool, which failed to recognize the different circumstances households find themselves in.
Helpfully, the government’s Social Security Advisory Committee flagged their concern about the proposal, and triggered a DWP consultation – otherwise this change might have been quietly introduced by the back door.
Shelter responded to the consultation, to tell DWP what the change would mean for struggling renters.
And, in part, DWP has heard that message: Lord Freud, Minister for Welfare Reform, took the decision not to raise deductions to 40%. Instead, new regulations have been laid which state that DWP can deduct between 10 to 20% of core benefits to pay back rent arrears (the exact deduction will depend on whether the renter is repaying other debts through their benefits).
It’s a technical, but significant decision, and one we’re glad Lord Freud has taken. It’s also positive that the Minister himself was involved, because it shows that rent arrears and evictions are climbing up the political agenda. This issue deserves more attention, as the latest government statistics show that more and more renters are being evicted.
Private renters are particularly at risk of eviction, because private landlords don’t need a reason to evict their tenants. So, these new DWP regulations may reassure landlords that they will get their rent back quicker, but do nothing to assure private renters that they won’t face eviction once they have repaid their debt.
The conversation about how best to protect struggling renters needs to continue until the right balance between protecting tenants and landlords is struck.