One of the problems of working out what’s happening with the cuts is that there are so many overlapping changes that it’s difficult to be sure what the implications might be. Gareth Morgan has just posted a lengthy report (be warned – it’s a big file) identifying the combined effects of limits in Local Housing Allowances and the benefits cap for different rental areas throughout England, Scotland and Wales. In most places the cuts really bite for couples with three or more children.
Tag: social housing
Weekly rents and monthly benefits
In Housing Scotland magazine recently, I wrote that when Universal Credit is introduced, “RSLs (social landlords) who continue to use weekly rents will not be helping their tenants”. I’ve been asked if I could explain what I meant, so here is the point at greater length.
Under Universal Credit, people aren’t going to be paid benefit every week; they’re going to be paid by the calendar month. If their circumstances stay the same, they’re going to get the same benefit every calendar month. If the landlord charges rent weekly, there’ll be no connection between the benefit cheque and when the rent falls due. A weekly rent means that tenants pay four times a month in some months, and five times a month in others; but a tenant who has to pay rent five times in one month will have to pay it from the same benefit which is used for four times a month. In the same way, with fortnightly rents, there’ll normally be two fortnights a year which have to be paid as an extra out of one month’s benefit.
Because there won’t normally be direct payments, these are bills that people will have to pay themselves out of their monthly benefit. I think this is going to make budgeting really tough for tenants, but fortunately the problem is easily avoided. All an RSL has to do is to charge by the calendar month, which is what most private landlords do, and the problems disappear.