Universal Credit direct payment demonstration projects will be extended for six months

The Universal Credit direct payment demonstration projects will be extended for a further six months, Minister for Welfare Reform Lord Freud recently announced, as new findings from the projects are published.

The Department for Work and Pensions says the extension will help to further develop the support needed for social housing tenants moving onto Universal Credit. The projects will now run until the end of the year.

The latest findings from the projects show a rise in the rent collection rate to an average of 94%, helped by more than 1,000 tenants who have had their payments 'switched back' to their landlord.

Lord Freud said: "The demonstration projects show the majority of claimants are managing their own rent – even through Christmas when budgets can be tight.

"But we have always been clear that there needs to be protection for both tenants and landlords if people build up arrears and to target help at those people who should not be placed on direct payments.

"The projects are helping us to develop and set this protection and that is why we are extending them for six months."

New figures from the demonstration projects show 6,168 tenants received direct payments, the total level of rent charged stood at £19,204,022 and an increase in the average rent collection rate to 94% – with levels of rent payment rates on the projects varying from 91% to 97%.

A total of 6,168 tenants are currently paid by direct payment, another 1,258 tenants had been paid by direct payment but have now had the payments switched back to their landlord.

The projects are investigating a range of different elements of direct payments to provide protection for landlords and tenants including:

  • Levels of support tenants may need to start direct payments, such as advice on managing personal finances and budgeting
  • The exemptions that need to be in place for direct payments
  • Payment switch-backs to the landlord if a tenant falls into arrears
  • The support needed to help tenants in arrears to pay back their arrears and to potentially return to direct payments
  • Early intervention switch-backs before arrears reach trigger points