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Concerns about how Universal Credit deals with changes of circumstances

Elements of Universal Credit will pose significant challenges for claimants, advisers and landlords. Housing Rights has particular concerns about how Universal Credit deals with changes of circumstance, particularly in respect of tenants who move home during an assessment period. Changes of circumstances are backdated to the beginning of the assessment period in which the change happened. In the most extreme cases, we are concerned that this could result in a claimant receiving no financial assistance with legitimate housing costs.

Universal Credit assessment periods

Unlike existing benefits, Universal Credit is assessed on a monthly basis. A claimant’s specific assessment period will depend on when the claim is submitted. So for example, if a claimant’s eligibility to Universal Credit commences on the 8th October, subsequent assessment periods will begin on the 8th of each month. The way in which changes in circumstances are treated in Universal Credit is linked to the month-long assessment period. Generally, a change in circumstances will be backdated to the beginning of the assessment period in which it happened, even if the change actually occurred just a few days before the end of the assessment period.

Changes of circumstance in Universal Credit

Changes in circumstance for Universal Credit are governed by the Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Decisions and Appeals) Regulations (Northern Ireland) 2016. Part 3 of Schedule 1 to these Regulations states that:

“[. . .] in the case of universal credit, a superseding decision made on the ground of a change of circumstances takes effect from the first day of the assessment period in which that change occurred or is expected to occur.”

This will impact heavily on any Universal Credit claimant who moves to a new home, or moves back with family, during an assessment period.  In effect, it means that if someone moves house in the middle of their assessment period, the Universal Credit system will treat them as though they moved house on day 1 of that assessment period.

How will this affect social housing transfers?

David is a Universal Credit claimant. He lives in a 1-bed Housing Executive tenancy, and is receiving UC housing costs element of £345 per month. David’s Universal Credit assessment period starts on the 3rd of each month.

David is offered and accepts a new tenancy with a housing association, which he moves to on the 27th November.  A few days later, he updates his Universal Credit claim with his new address and new rental charge. David’s total monthly rent for this property is £520.

Universal Credit will backdate this change to the start of David’s assessment period, or the 3rd November. His housing costs for the month are £520, and will be paid directly to the housing association, even though David is only liable for one week’s rent at this new property. The Housing Executive will receive no payment for the final three weeks of David’s tenancy.  

In this scenario, the Housing Executive and the housing association will have to work together to reattribute the money paid in respect of David’s claim.

Wider impacts of this policy

The way in which Universal Credit treats changes of circumstance could have significant negative implications for claimants and for private and social landlords. The above scenario, of a claimant moving from one social tenancy to another, will pose issues for the claimant and the respective landlords. However, these issues will arise when there is basically any change in tenancy, including:

  • Moving from one landlord to another, where all housing costs will be paid to the new landlord
  • Leaving a tenancy to move in with family and friends, where no housing costs will be paid at all as the claimant has no liability for rent at the end of the assessment period
  • Moving to or from temporary accommodation, where the claimant could encounter difficulties moving between the Housing Benefit and Universal Credit system.

These impacts will be even more keenly felt, given the fact that Universal Credit does not allow for overlapping payments when a claimant starts a new tenancy, in the way that Housing Benefit does.

Mitigating the worst impacts

Ideally, claimants in receipt of Universal Credit who are intending to change their address should do so as early in their assessment period as possible in order to minimise the impact of this change. However, this is not always going to be possible, as housing providers often dictate move-in dates and are under pressure to ensure speedy allocation of properties and minimise voids.

Social housing providers will also need to consider how they can reconcile payments for former or new tenants where they have received more or less rental assistance than they should have as a result of this quirk.

Housing Rights is keen to hear from advice agencies and landlords on this issue, and the practical experience of this as Universal Credit rolls out. If you have any queries or concerns in relation to this issue, you can contact our Policy Officer Stephen Orme.

 

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Benefits, Money Matters, Welfare Reform, Policy, Affordability