Research and analysis

Universal Credit and the patterns of rent balances in the Social Rented Sector: Social Research

Published 7 October 2024

Background

A report of research carried out by the Department for Work and Pensions (DWP) in conjunction with eight social landlords (Curo, Dudley Metropolitan Borough Council (MBC), GreenSquare Group^{[footnote 1]}, Northwards Housing^{[footnote 2]}, Notting Hill Genesis Housing Group, Tai Tarian, Together Housing Group and Your Homes Newcastle) in England and Wales.

The DWP would like to thank the landlords for their help and advice in compiling this report, and their commitment to working with DWP to understand how Universal Credit (UC) works for their tenants.

In particular, we would like to thank the following stakeholders who represented the landlords involved in the project: Sarah Seeger, Emma Owens, Edward Hodgkinson, Matthew Newman, Michael Barstow, Mark Windos, Nerys Rees, Peter Southall, Tracy Langton, Molly Dunne, Shaun Williams, Pippa Bell, Ann Neblett and Catherine Ludwig without whose help this report would not have been possible.

We would like to thank Yasmin White, Katrina Leary and Stephen Finlay at Ipsos MORI who designed, conducted and analysed the interviews with the tenants of the social landlords taking part in this research and presented in chapter three of this report.

Thanks are also due to Simon Lunn, Edward Green and Adam Robinson at DWP who helped conduct the interviews with the social landlords taking part in this research, analysis the data and commenting on the drafts of this report.

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First published October 2024 ISBN 978-1-78659-729-8

Views expressed in this report are not necessarily those of DWP or any other Government Department.

Executive summary

This publication reports on a project to understand of the impact of Universal Credit on the pattern of rent arrears for tenants of social landlords. It covers the experience of social landlords and their tenants and is the companion report to Universal Credit and the patterns of rent balances in the Social Rented Sector: Rent Analysis that examines the rent history of 15,750 social housing tenants who could be linked to DWP administrative records.

The data was collected over early 2014 to January 2019 and so captures the early period of UC roll out and therefore predates the COVID-19 pandemic, and associated societal changes including job losses, furlough, and changes to benefit rates.

People will claim UC often following a life event or change in circumstance such as losing their job or separating from a partner that can be associated with financial issues. Some tenants that make regular and timely payments on their rent account and claiming UC may be considered to be in book arrears. This is due to the difference between when their rent is charged (usually weekly or four-weekly), and when their UC is paid.

Experiences of social landlords

• pre-claim work: encourage prospective tenants to apply for UC if eligible/appropriate and encourage to ask for an Advance where appropriate. Assisting with 2 week HB run-on if eligible, encourage payment of rent in advance, ensure housing is affordable for the tenant. However, this may not help tenants migrating with pre-existing arrears and/or have complex needs
• support for tenants: check housing size is appropriate (avoid under- occupation and RSRS), look to reduce utility bills, automated texts/SMS’s, drop- in clinics/surgeries, Employability and Training programmes, help with digital literacy and access and making UC claims. Internal training for staff to boast understanding of UC
• Housing and Arrears management: migrating to UC can be challenging when an LA first went live, ‘steep learning curve’, differences here between landlords with some going for those with low-levels of arrears, some going for the higher levels. Cash flow can be a key issue but most were happy arrears would stabilise and start to fall. Using triage systems to identify which tenants need support/intervention. Main thing is communication of the significant culture change from legacy to UC with tenant having to pay their rent themselves. Variable incomes is even more of a challenge especially if on partial housing payment and/or an APA

• approach to APAs: Some differences in APA usage, mostly avoiding except for cases of significantly high arrears or tenants refusing to engage with the landlord. Time it takes to put an APA in place and until recently timeliness of payment. Hard to get tenants off of APA’s. Preference for tenants to be self- payer (culture change). Deductions Some very happy to use some decline

• Landlord Portal – ‘portal is a godsend’ ‘Like all Christmases came at once’. Mostly all find APA’S much easier and coping with UC much easier since introduction of the Landlord Portal. Several constructive practical/operational suggestions to further improve the effectiveness of the Portal

Experiences of tenants

• financial stability had the greatest impact on ability to pay rent, prior to claiming UC. Previous receipt of housing benefit and financial management skills also had an impact
• tenants claimed UC as a result of a life event, resulting in a change in income and/or the benefits they were eligible for
• tenants were prompt in making their claim, however there were those who delayed making their claim due to uncertainty and a lack of knowledge. In some cases tenants found the claim process straightforward and without delays. For others, delays arose due to issues with verification, IT issues and a lack of knowledge and / or support
• tenants experienced a degree of financial strain during the claim process. This was mitigated by the availability of financial support, alternative income, previous debt and the level of understanding of their claim
• alternative Payment Arrangements were viewed positively by Tenants, however, there were frustrations amongst those who now how to pay their rent themselves
• both informal and formal repayment plans were in place to help participants make repayments if they had been in rent arrears
• prior to making their claim, tenants recalled having a limited understanding of UC, but this improved over time
• landlords played an important role in the claim process as they were able to answer queries relating to their rent payments and appeared to be understanding if tenants found themselves in arrears.
• in terms of support, more information is needed, prior to making their claim, about how UC works, including who will be responsible for rent payments. Those tenants identified as vulnerable might need additional support

1. Introduction

UC was initially introduced in 2013 and was expanded gradually until 2018 as part of its strategy to reform the system of benefits for working-age claimants. It is now available everywhere in Great Britain. UC replaces the following 6 benefits and tax credits:

• Housing Benefit (HB)
• Income-based Jobseeker’s Allowance (JSA)
• Income Support
• Income-related Employment and Support Allowance (ESA)
• Child Tax Credit
• Working Tax Credit.

Unlike its predecessors, UC is calculated and paid on a monthly basis, and requires claimants to have an online UC account to manage their claim.

The data collected covers the period 2014 to early 2019 and while it captures the early period of UC roll out it therefore predates the COVID-19 pandemic, and associated societal changes including job losses, furlough, and changes to benefit rates. The report includes data covering the period of the expansion of UC to UC Full Service

A number of organisations have expressed interest in obtaining more information on the effect of UC on the pattern of rent arrears.

Information on rent arrears is not routinely collected by DWP. The Department only collects information from claimants that is needed to calculate their UC award. So it collects and verifies evidence on the amount of rent, but does not collect the claimant’s rent payment history^{[footnote 3]}.

In order to improve our understanding of this issue, the Department invited social landlords spread throughout the mainland of Great Britain to volunteer to take part in this work. Specifically, landlords representing:

• Local Authority landlords, Housing Associations/Registered Providers, ALMOs and EMBs with at least 1,000 tenants who are on UC (preferably UCFS)
• landlords whose properties/tenants are predominantly in the London area, central England, the North of England, Scotland and/or Wales, a metropolitan area, a mixed urban and rural area or a mixed urban and costal area
• that were users of the Aareon QL Housing Management System^{[footnote 4]}.

In addition to the analysis of the patterns of rent arrears, the Department conducted structured interviews with the landlords that volunteered for the project and commissioned Ipsos MORI to undertake primary research with a sample of the tenants to gain a fuller understanding of the reasons why the patterns of rent arrears develop and the tenants experience.

DWP and 8 Social Rented Sector (SRS) landlords have carried out a joint project. With measures to preserve individual anonymity, claimants’ UC administrative data were linked to their rent payment records. This information was then used to assess the pattern of rent arrears prior to and after the UC claim. Our key findings from this work are set out in in the report: Universal Credit and the patterns of rent balances in the Social Rented Sector: Rent Analysis.

The Department was also keen to understand the claimants experience of UC and how they managed their rent payments from the claimant/tenants perspective. This report sets out the key findings of qualitative research that was undertaken with tenants of the eight Social Rented Sector landlords and describes the landlords themselves in terms of their structure, area of operation, profile of housing stock, support for tenants, pre-tenancy work, arrears and housing management, approach to alternative payment arrangements and the Landlord Portal.

1.1 Universal Credit

UC supports people who are on a low income or out of work and helps to ensure that they are better off in work than on benefits. UC is an integrated, income-related, working-age benefit providing households with a personal allowance topped up by additional components, which recognise the needs of claimants with children, housing costs, disability and health conditions that limit work, and caring responsibilities, and is paid monthly in arrears.

Universal Credit Live Service was initially introduced in 2013 and was expanded gradually until 2018. By May 2016 it was available in every local authority in Great Britain. It closed to new claims from 1 January 2018 and closed to existing claimants by March 2019. Full service is the final system that offers UC to the full range of claimant groups. It is also known as the digital service. New claims are made on gov.uk and most accounts are managed only through an online account.

The aim of UC is to tackle the problems of poor work incentives and complexity within the previous system of benefits and tax credits. As published in the Universal Credit Evaluation Framework the overarching aims are to:

• encourage more people into work and to make even small amounts of work pay and be seen to pay

• smooth the transition into work by offering a single benefit that removes the distinction between being in and out of work

• offer a simpler support, with one system replacing multiple systems, therefore reducing administration costs and the propensity for fraud and error

• tackle poverty both through increased take-up since the system will be simpler and from increased reward from employment for the customer

1.1.1 Help with housing costs under Universal Credit

In most cases UC is a single, monthly payment which is paid directly into the claimant’s bank account and includes all eligible housing costs. This means that claimants are responsible for paying their own rent.

Couples living in the same household receive one monthly payment between them, this can be paid into a joint account or a single account in either person’s name. Any other adults living in the same household who are claiming UC are paid separately.

When a new claim for UC includes rented housing costs, payments are usually paid as part of the single UC payment. Since April 2018, if Housing Benefit had previously been in payment, an additional payment of two weeks’ worth of Housing Benefit was paid to provide support during the transition to UC.

1.1.2 Alternative payment arrangements and rent arrears deductions

Alternative payment arrangements (APAs) are available for claimants who cannot manage their monthly payment. They can be considered at any point during a UC claim and are considered on a case by case basis. The need for an APA can be identified by the claimant, landlord, work coach or case manager.

An APA can be a more frequent than monthly payment, a split payment of an award between partners or a managed payment to landlord (MPTL). A MPTL allows direct payment of housing costs to be made to a landlord. A MPTL can be requested at any time. Social Rented Sector Landlords can request managed payments using the Universal Credit Landlord Portal.

Rent arrears deductions can be made from a claimant’s UC award if arrears of at least two months’ rent have accrued. Rent arrears deductions are only available for the property where the claimant currently resides and do not cover any properties they previously lived in. This deduction safeguards vulnerable claimants who could be at risk of homelessness.

Payment Frequency

The payment frequency of HB depends on the type of SRS landlord Table 1-1 shows that for the majority of SRS tenants there are two different HB payment intervals depending on the type of SRS landlord.

Table 1-1: Frequency and destination of Housing Benefit payment

Social Landlord	Payment frequency	Recipient
Housing Association	93% of claimants are paid HB 4 weeks in arrears	Less than 7% of claimants are paid HB directly
Local Authorities	90% of landlords are paid HB in advance on a weekly basis	A negligible proportion of claimants are paid HB directly

Source: SHBE, November 2019 – all claimants in the SRS (not just the eight landlords)

Before the introduction of UC, there were a little over 2 million HB working-age claimants in the SRS with around 60% in HA and 40% in LA accommodation (including ALMOs).

Changes to housing support under UC

Housing processes in UC have changed since the introduction of UC and the period covered by this report pre-dates several important changes. For example, the introduction of Trusted Partner status for landlords, the development of the Landlord Portal, and the streamlining of rent verification processes. The UC housing processes have changed during the period covered by this report, see Table 1.1.

Table 1-2 UC housing process

a. Introduced Trusted Partner status	March 2017
a. Introduced Landlord Portal	March 2017
b. Changes to the rent verification processes	March 2017
c. Removal of 7-day waiting period	February 2018
d. Two-week HB payment for transition to UC	April 2018
e. Enhancements to the UC monthly statements	November 2019

1.1.5 Benefit uprating and other policy changes

This report looks at the rent balances of UC claimants since early 2014. Alongside general economic and social factors that affect a claimant’s financial position, policy changes during this period include:

• most working-age benefits and tax credit elements were subject to a four-year freeze, covering the period 2016/17 to 2019/20. This followed a three-year period (2013/14-2015/16) when increases were limited to 1 per cent. The four- year freeze was announced in the 2015 Summer Budget and legislated for by the Welfare Reform and Work Act 2016. This freeze covered the various allowances, premiums and Local Housing Allowance (LHA) rates (for claimants renting in the PRS) for HB claimants and the UC equivalents and ended in April this year

• The Welfare Reform and Work Act (2016) also introduced rules around the levels of rent charged by registered providers of social housing (Local Authorities and Housing Associations) in England from 1 April 2016. This required registered providers to reduce the majority of social rents by 1 per cent per annum over four years. A maximum rent was set for new tenancies, up to the social rent rate defined in the Act. Exemptions from the social rent reduction rules were also provided for certain types of providers such as those designated as specialised supported housing or temporary social housing. In addition, different rent setting policies were applied in Scotland and Wales

• benefit cap reduction – the benefit cap is a limit on the total amount of income from certain benefits a household can receive. This limit was reduced in November 2016 and tiered according to whether a claimant lives within Greater London or elsewhere

1.2 Causes of changes in rent balances

“Rent balance” is defined in relation to a tenant’s rent account. A tenant in arrears, that is with a build-up of rent that is owed to the landlord, is defined as having a positive rent balance; a tenant with a surplus on their rent account is defined as having a negative rent balance. There are a number of possible specific causes of rent arrears in UC, which themselves are influenced by underlying factors outside the scope of this report. For instance, specific causes may include:

a. Previously accrued arrears

Claimants may have accrued arrears before the start of their UC claim.

b. A one-off switch in benefit payment frequency

SRS landlords charge rents on a weekly basis. The payment interval of housing support differs between HB and UC and partly depends upon the type of SRS landlord and to whom HB was previously paid. This can lead to a one-off contribution to rent arrears when moving from HB to UC.

c. Delays in UC payment

In April 2020, the provisional figures from Stat-Xplore show that around 95% of SRS tenants who are new UC claimants with the housing element receive their payments on time with another 3% receiving some payment on time^{[footnote 5]}. For the claimants that experienced a delay in the payment of housing costs, this may contribute to their non-payment of rent. These delays may be caused in processing by DWP, but could also be because the recipient has not submitted the correct information on time.

Payment timeliness has generally improved during the period that rent balance data was collected from landlords.

d. Short term accumulation of arrears

UC is paid monthly in arrears; claimants may accrue rent arrears if their rent accounts are debited weekly. This will result in a monthly ‘saw-tooth’ pattern of gradually accumulating arrears and then decline due to a rent payment. These arrears should be short term in nature if the recipient pays their rent on receipt of their UC payment.

e. Claimant non-payment or delayed payment

Arrears may accrue where a tenant on UC does not pay all of their rent or does not pay their rent on time.

The linked rent and benefit administration dataset that we have created does not allow us to isolate the relative size of all of these factors. However, it does allow us to estimate the size of arrears prior to the UC award and gives an indication of the impact of short-term arrears due to changes in payment timings.

1.3 Key research questions

To understand the social landlords experience of their tenants transitioning to UC and the landlords themselves, the report will answer the following questions about:

• the landlords structure, area of operation, profile of housing stock,
• their pre-claim work with tenants
• the support they provide for tenants,
• their arrears and housing management practice
• their approach to alternative payment arrangements
• their experience of the Landlord Portal

To understand the claimants experience of UC and how they managed their rent payments, the report will answer the following questions:

• Why are tenants already in arrears and / or why do they go into arrears when they claim?
• Why do tenants delay making their claim, what are the consequences and how do they support themselves?
• What are tenants understanding of Universal Credit?
• What additional support is needed to prevent tenants from getting into arrears?

1.4 Qualitative report

The analysis of claimants’ UC administrative data linked to their rent payment records that has been used to assess the pattern of rent arrears prior to and after the UC claim is captured in a separate quantitative report Universal Credit and the patterns of rent balances in the Social Rented Sector: Rent Analysis.

It explores the pattern of rent arrears prior to and after the UC claim. It is based on claimants of eight social landlords UC administrative data linked to their rent payment records of their landlords.

A full outline of the analysis and its methodology is in Universal Credit and the patterns of rent balances in the Social Rented Sector: Rent Analysis.

1.5 Data Protection and confidentiality

Data matching was carried out in accordance with the General Data Protection Regulation (GDPR).

The DWP staff who carried out the analysis and constructed the sample of tenants had access only to anonymised DWP, HMRC and landlord data. Landlord and DWP data was shared under Data Sharing Agreements and was used solely for analytical purposes.

2. Social Rented Sector Landlords

This chapter details the 8 Social Rented Sector landlords, their structure, area of operation, profile of housing stock, support for tenants, pre-tenancy work, arrears and housing management, approach to alternative payment arrangements and the Landlord Portal.

2.1 The SRS landlords

Eight SRS landlords took part in this project based across England and Wales:

• 5 Housing Associations (HA)
• 1 Local Authority (LA)
• 2 Arm’s-Length Management Organisations (ALMO)

Table 2.1 below lists the eight landlords and shows the number of properties managed ranged from 9,000 and 64,000. At the time of the data was extracted for the research, the number of UC claimants who were renting from each landlord was between 800 and 5,000. Taken together these SRS tenants represented around 3% of UC SRS households for England and Wales in February 2019.

Table 2-1: A summary of the landlords (further information in Annex A)

Landlord	Type	Region	Properties	First UCFS Rollout date
Curo	HA	South West	13,000	May 2016
Dudley MBC	LA	West Midlands	27,250	July 2017
GreenSquare Group[footnote 6]	HA	South West	12,000	May 2017
Notting Hill Genesis	HA	London and South East	64,000	November 2015
Northwards Housing	ALMO[footnote 7]	North West	13,000	October 2017
Tai Tarian	HA	Wales	9,000	October 2017
Together Housing	HA	North West	38,000	December 2017
Your Homes Newcastle	ALMO	North East	26,700	May 2016

Structured interviews were held with all the landlords over the winter and spring of 2018-2019 to help understand how their management practices and approach to managing rent arrears has developed with UC and may impact on the analysis of their rent data.

The topics discussed in the structured interviews covered:

• pre-claim work with tenants
• landlord support for tenants
• changes to housing management and arrears policies with UC
• approach to Alternative payment arrangements (APAs)
• the Landlord Portal

The findings from these interviews and discussions are summarised below.

2.2 Pre-claim work with tenants

UC is designed to be claimed online. If tenants do not have access to the internet or are not confident using a computer, their jobcentre can tell them about local services that can help.

Social landlords can help tenants to get ready for UC by encouraging them to:

• go online and set up an e-mail account
• open a bank account to receive UC payments
• know how much their rent and eligible service charges are (including rent free weeks) and who their landlord is
• set up direct debits for housing costs

The landlords reported that in addition to those outlined above, they were undertaking a number of activities with their tenants who were naturally migrating to UC and potential tenants who had been nominated to them or had applied for housing before they make a claim for UC. These included:

• encouraging tenants and potential tenants to apply for UC if they were eligible and making a claim would be appropriate

• tenants are encouraged to ask for an Advance if it would be appropriate to their circumstances and after explaining that as an advance it would have to be repaid from their monthly UC award
• since April 2018, helping legacy tenants naturally migrating to UC to secure the two-week Housing Benefit run-on to provide support during the transition to UC
• landlords undertook income assessments to ensure that the housing they offered is affordable for the tenant
• applying for Managed Payment to Landlord APAs to avoid increases in arrears for tenants with pre-existing arrears and/or if they had identified that the tenant had complex needs when moving onto UC
• some landlords asked their tenants for rent to be paid in advance (3 in 6 landlords). This ranged from one weeks’ to a month’s rent

2.3 Landlord support for tenants

All the landlords reported that they were providing a range of support to their tenants who were naturally migrating to UC. Most if not all landlords had provided support before the introduction of UC.

All the landlords reported that they had had to considerably increase the amount and range of support that they provided to their tenants since the introduction of UC.

The support that landlords provided included:

• checking housing size is appropriate (to avoid under-occupation and RSRS)
• looking to reduce utility bills
• offering Employability and Training programmes
• running drop-in clinics/surgeries
• using automated texts/SMSs for tenant communications
• helping tenants with making UC claims and digital access
• improving staff knowledge through internal training on how UC works

The landlords also reported that as a result of their increased support activities that they had a better, sometimes much better knowledge of their tenants and their needs.

2.4 Housing and arrears management

Social landlords are required to manage and maintain their properties in accordance with standards set out by their regulators. This includes property maintenance, tenancy management, void management and managing rent collection from their tenants.

Under the legacy benefit system, social landlords worked closely with local authority housing benefit departments. This entailed regular, if not daily liaison about individual tenants’ housing benefit claims and for the majority of tenants’ direct payment of housing benefit to their landlord.

If the social landlord was the local authority (council housing) any housing benefit (full or partial payment) was rebated directly to the tenants rent account. Local authority tenants were sometimes unaware that they had a rent liability.

The transition to UC for social housing tenants involved a major change in the way they paid their rent and for some, local authority tenants in particular it could be the first they experienced the responsibility to pay their own rent.

The landlords were asked about their housing management practices and how they prevented and controlled rent arrears among their tenants and how this had changed when their tenants transitioned to UC.

All the landlords reported that they had had to adapt and modify their housing management organisation and practices. For some this included a major change in approach. For others, changes in practice and structure that were already underway were accelerated.

These changes involved reorganisation from traditional ‘patch based’ housing management where housing officers no longer worked an area or estate to new functional teams that focused on tenancy support and arrears management with new roles such as tenancy support and rent management officers. New and specialist roles have been created to provide money and in some cases with additional training debt advice.

The main themes that emerged were:

• it can be challenging when a Local Authority first goes live, it can be a ‘steep learning curve’. This can be compounded when housing stock is spread across a number of Local Authorities who had different go live dates
• working out which tenants are on UC can sometimes be challenging. Landlords were not always informed that housing benefit had stopped and only became aware when an expected housing benefit payment was not received

• there was a need to communicate change for legacy tenants moving onto UC, with tenants now having to pay rent themselves. This involved a major culture change for most tenants

• the language/terminology used by landlords needed to change to help make tenants realise ‘arrears’ means a ‘debt’ – for example ‘you owe us money for your rent’
• cash-flow was an issue recognised by all landlords; but the majority were expecting arrears to stabilise and decrease over time
• all landlords developed and used their own form of triage systems to identify which tenants need support/intervention. There were some differences in approaches – with some landlords predominantly targeting tenants with low- levels of arrears, and others going for those with relatively higher arrears
• encouraging tenants to establish Direct Debits was a useful practice but not possible for all Landlords to implement
• tenants with variable incomes on UC is also a challenge especially if the tenant is on partial housing costs and/or an APA. Tenants with variable incomes was not a new issue and long noted as a potential arrears risk but the transition to UC increased the chance of arrears, sometimes considerably
• issues of rent arrears can be conflated by vulnerabilities and complex needs. Challenges can include: English to Speakers of Other Languages (ESOL, egEastern European), addiction and mental health issues, geographical location, digital literacy and suchlike

2.5 Approach to alternative payment arrangements (APAs)

If a tenant experiences difficulty in managing their single monthly payment or gets into difficulty paying their rent, the claimant, their work coach, Case Manager or their landlord can apply for the Managed Payment to Landlord (MPTL) Alternative Payment Arrangement (APA) at the start of a claim or at any time, which will be considered on a case by case basis.

The amount of any managed payment received by a landlord may change from month to month depending on the claimant’s UC award, usually up to a maximum value of the eligible housing costs.

A MPTL can be made when:

• a claimant is in arrears with their rent for an amount equal to, or more than, two months of their rent

• a claimant has continually underpaid their rent over more than two months, and they have accrued arrears of an amount equal to or more than one month’s rent
• any of the other Tier 1 and Tier 2 APA factors apply
• a claimant was previously in receipt of Housing Benefit and it was paid to their landlord, a MPTL can be considered providing the claimant continues to meet the Tier 1 or Tier 2 APA factors

Social landlords who part of the Trusted Partner scheme are expected to have conversations with their tenants at the start of their UC claim.

Arrears of rent and service charges for the property the tenant is currently living in are included in the list of deductions that can be made from a UC payment.

Where a tenant has rent arrears of two months’ rent or more, their current landlord can also request a rent arrears deduction.

The landlords had a range of approaches to APA’s included:

• the majority of the landlords try not to use APA’s as far as possible, except for cases of significantly high arrears or tenants refusing to engage with the landlord
• ‘In the time it takes to put an APA in place, you might as well do it yourself’. A key concern was the time to get an APA into payment. At the time of the interviews an eleven-week wait for payment was not unusual for social landlords and a key factor in shaping their views here.
• once on an APA, it can be hard to get tenants off of APA’s again. Examples were cited of where both they (the landlord) and their tenant had requested an APA to end but payments continued regardless
• above all, those landlords who try not to use APA’s would prefer tenants to pay their rent directly to them. They wished to see the majority of the tenants become ‘self-payers’ who meet their rent themselves be it from their earned, benefit income or a combination of the two. This marks a growing culture change from the legacy benefit system
• landlords views on and usage of deductions were mixed. Some were very happy to use them and saw them as a useful if not essential tool for recovering arrears. Others however refused to request deductions arguing that the amount deducted and particularly if other deductions were in play could endanger the tenancy as the tenant could be left with insufficient UC award to cover their basic living costs for themselves and their families such as food and heating

As described above, the landlords were keen to talk about the method of payment of MPTL APAs. At the time of the interviews, payments were made through the existing Third-Party Payment Service using their Portal Customer Reference Number (CRN). Some landlords had existing non-portal CRN that were not aligned. Any movement of APAs between CRNs interfered with payments.

Landlords received one payment per tenant per assessment period. If multiple tenants had the same payment date, they received multiple payments per day. However, the Third-Party Payment Service worked on a four-week payment cycle that did not align with tenants’ payment date or rent due date.

Payment reconciliation details available through the Portal for some landlords. The payment reconciliation details were typically the tenants’ national insurance number (NINO) which many landlords did not hold. For some landlords the payment reconciliation details were not available through the Portal and were sent separately on a printed schedule. For most of the landlords this resulted in significant additional payment reconciliation work for their finance and rent staff to allocate payments to the correct tenants rent account and created additional cash flow issues for those landlords that had high proportions of their tenants on MPTL APAs.

2.6 The Landlord Portal

The Universal Credit Landlord Portal was introduced in response to social sector landlords concerns about the UC email based rent verification process and rolled out to social sector landlords between 2017-2018. It allows social landlords to verify rent and submit managed payment requests online, rather than by email.

Through it, social landlords can:

• verify tenants’ housing costs - request a Managed Payment to Landlord (MPTL)
• request a deduction for rent arrears
• request a more frequent payment to tenants

The Landlord Portal is currently only available for tenants making a new UC claim, or existing claims when a tenant has a change of circumstances that requires a rent verification.

All the landlords in the research were on the Landlord Portal by the time they were interviewed but some had more experience of its use than others. The landlords were universally supportive of the Landlord Portal but still saw room for improvement.

The main themes from the landlords on the Landlord Portal were:

• ‘Portal is a Godsend’ and ‘Like all Christmases came at once’
• majority said that they found APA’s much easier with the Portal
• Several landlords made constructive and practical suggestions, such as:
  • being able to administer their own staff as users
  • being able to collect tenant email addresses and mobile numbers from the Portal, so that the Landlord can have key contact details for the tenant

In December 2019 the Department announced plans to start a small-scale test with a group of Social Landlords to align the way that Managed Payments to Landlords (MPTL) are paid with a claimant’s Assessment Period. In July 2020 the Department completed the testing of the payment alignment feature and commenced rolling this feature out to all Portal landlords from August 2020.

This means that landlords will receive the housing cost element at the same time as their tenant receives their UC payment, as well as being able to access payment information via the Landlord Portal, where a managed payment is in place. This should greatly improve landlords’ ability to manage payments and reconcile UC housing costs, helping landlords to support their tenants going forward.

3. Qualitative research with landlord tenants

This chapter of the report provides an overview of the qualitative research conducted by Ipsos MORI. This research included 42 telephone depth interviews with tenants, who rent from one of seven landlords. A detailed explanation of the methodology is included in Annex B.

3.1 Reasons for making Universal Credit claim and claimant history

3.1.1  Rent payment history prior to claiming Universal Credit

The provision of housing benefit, financial stability and ability to manage finances were all identified as factors which impacted tenants’ ability to remain in balance with their rent payments prior to claiming UC.

Participants who received housing benefit that covered all of their rent, and was paid directly to their landlord, were, understandably, less likely to get into arrears.

This is because they had no role in managing payments, enabling them to always be in balance.

I was never in debt before Universal Credit…you couldn’t really get in debt as it went straight to them [landlord] - Female, 25-44

For tenants whose rent was not covered in full by housing benefit, financial stability had the greatest impact on their ability to stay in balance with their rent. Participants’ financial circumstances varied in the period before making their UC claim. The stability of their employment income and / or benefit payments impacted on their ability to continuously pay their rent, in full and on time. Participants who had been receiving a consistent flow of income either from their work, their benefits or both were better able to manage their money. Financial stability meant that participants were able to work with established budgets and routine payments which helped them to keep up to date with their rent payments.

It was just a routine I was in - Female, 25-44

On the opposing end of the scale, there were those who had been in and out of work for a long period. This meant that they had not had a sustained period of time in work, nor on benefits. During these periods of fluctuation, participants were more likely to find it difficult to manage their finances, leading to individuals’ finding themselves in arrears. This instability was attributed to factors including; long-term health conditions, changes to their benefits and an unstable labour market.

Participants who received financial support from friends and family or had accessed formal loans, during these periods of financial instability, were able to avoid getting into arrears, but this was not available to everyone.

The case studies below provide examples of financial instability and the impact on rent payments.

Participants also varied in terms of their financial management. There were tenants who had poor financial management skills who found themselves unable to budget and keep up to data with their rent payments and other bills.

What should have been paid for my rent I was using to pay for my driving lessons. The really dumb thing about it as well was I didn’t exactly get any further to passing my test at that point - Female, 25-44

Other tenants recalled needing to prioritise outgoings which would have the greatest consequence if they were not paid. This included spending money on other essential bills or their children.

I had two major outgoings, my childcare and rent…. I thought I’d prioritise the childcare because without that, I can’t go to work…. I thought I could let the rent go [unpaid] for a while - Female, 25-44

Skilled financial managers, who did not need to prioritise another bill, such as childcare, tended to budget for their rent and set this amount aside, making it less likely that they would get into arrears.

I’ve never been in arrears with my rent, it’s my priority once I get paid - Female, 25-44

Case study 1

Before claiming UC, Adrian had been working in retail operations and when he changed jobs, he had to wait a month before he received his first payment from his new job. This meant that during this time, Adrian found himself in arrears.

Case study 2

Samantha had been in and out of work prior to claiming UC. In the past she had to leave her job due to her mental health and claimed ESA. During this period, she did not make her Housing Benefit claim on time and subsequently got into arrears. Following this she returned to work, but then lost her job and went onto JSA. She did not feel JSA was enough to live on and her arrears proceeded to get worse.

3.1.2 Circumstances that led to claiming Universal Credit

Participant’s moved onto UC due to a change in their circumstances which impacted their work or income.

The main reason for claiming UC was because the participant had lost or left their job. This included those who were dismissed from their position, made redundant or those whose contract had come to an end. There were also participants who chose to leave the labour market due to developing issues with their mental or physical health. Physical health conditions made work that had a manual element, in particular, difficult to maintain.

This move to unemployment resulted in these participants applying for UC in order to keep up with their financial responsibilities. This applies to both those who were already receiving some legacy benefits and those who were solely relying on their wages previously. The following two case studies provide examples of where tenants fell out of the labour market and subsequently made a claim for UC.

Others made a claim due to a change in household composition which affected their income or eligibility for benefits. This included participants who had been bereaved or had ended a relationship. In cases where the participant’s partner had been the main earner, this change had a significant impact on household income which led participants to claiming UC. This included both participants who received benefits previously, that then needed to be topped up or changed, and those who were not in receipt of benefits beforehand.

In contrast, overall household income increased in situations where a participants’ partner had moved in with them. This change in circumstance altered the benefits that each individual was entitled to.

Neither of us knew that him moving in would affect mine or his benefits - Female, 25-44

Other changes resulted in participants no longer being eligible for certain benefits, and as a result they applied for UC to replace these. This included participants whose Carer’s Allowance claims ended when their relative passed away and participants who moved from JSA into employment but needed in- work financial support.

There were also participants claiming legacy benefits who were uncertain as to why they were told to make claim for UC and cannot recall experiencing a significant change to trigger this.

Case Study 3

Stephen used to work 43 hours a week as a metal polisher, however he had to stop work due to health reasons. Following this, he was signed off as not fit for work, and received ESA, housing benefit and council tax benefit. After one year, Stephen had an operation which resolved his health issues and he was considered fit for work and no longer eligible for ESA. As a result, Stephen began his claim for UC to top up his earnings.

Case Study 4

Michael has spent most of his career in temporary employment contracts. At the end of a temporary contract with a shop-fitting company, Michael became unemployed and claimed for UC in order to support himself financially.

3.1.3 Delays in making Universal Credit claim

Experiencing a significant decline in income generally meant that tenants were prompt to make a claim for UC as they were aware, they would not be able to cover their outgoings without support. However, uncertainty about their circumstances or about UC led some participants to delay making their claim.

Participants who lost or left a job and did not expect to find new work quickly, and those who had experienced a bereavement or end of a relationship tended to make their claim for UC as soon as they could. They were aware that if they did not take some action then they would not be able to make ends meet and believed that UC was their only option at that point in time.

This was also the case for participants who were no longer eligible for legacy benefits as it was made clear to them that they would need to apply for UC to replace these. Participants in this situation reported receiving a letter or phone call from DWP to make this change to their claim.

I made the claim as soon as they let me know my ESA had been cancelled, that was within the next couple of days - Male, 45-64

Participants who had become unemployed or had left work for health reasons sometimes believed they might be able to return to work quickly and so delayed claiming UC until they could no longer manage financially without support. These participants said they were reluctant to start claiming benefits and wanted to avoid this if they could.

Others reported that they were not aware their legacy benefits had stopped or that they were no longer eligible. As a result, they did not claim UC until they realised, they were no longer receiving their previous benefit payments.

There were also participants who were uncertain about whether or not they were eligible for UC and as a result, they put off their claim until they accessed information.

I just didn’t think we would get any help, because we didn’t get help before… I did an online calculator… I think it was Turn2us or something like that, and they had an online calculator and it said that we could be entitled to something, so I just thought I’d give it a go - Female, 18-24

These findings mirror those reported in the Wave 2 Omnibus survey^{[footnote 8]}. Almost three in ten reported that they ‘didn’t know what to do’ (28%), similarly 27% reported that they ‘thought I’d get another job quickly’, one fifth (21%) thought they ‘wouldn’t qualify for Universal Credit’, one sixth (16%) reported that they had a ‘medical condition that prevents me from applying / working’ and 12% thought that their ‘old benefits would start again’.

Case Study 5

Peter worked as a driver, as part of his role, DVLA require him to have a medical every three years. This ended up taking 10 months to process, which is much longer than he expected this to take. Peter delayed making his UC claim because he was unaware it would take so long for him to return to work.

Case Study 6

Jack was working as a delivery driver until he was made redundant. Jack delayed his UC claim for 4-5 weeks as he had hoped he would be able to find a new job. During this time his rent arrears worsened.

3.2 Experiences of making the claim

3.2.1 The claim process

Tenants experiences of making a claim for UC varied from those who found the claim straightforward to those who experienced a range of difficulties, which in some cases, resulted in delays. These experiences were dependent on the level of support they received, as well as the complexity of their claim.

In some cases, participants found the claim process easy to complete and free from delays. These participants said that the staff at the Jobcentre Plus were able to answer their queries. They were also likely to have received support from family and friends who had also been through the claim process; social networks are integral when it comes to navigating the UC process. The availability of support, both from the Jobcentre Plus and family and friends was more common amongst those who had made their claim at a later stage, as opposed to those who made their claim when UC was initially being rolled out.

They talked me through everything [at the Jobcentre Plus], and how to go about applying - Female, 25-44

I was okay with the process; the forms were pretty easy to fill out… I knew about the claim from other people in the area who did it before us and they were able to tell me about it - Female, 45-64

Participants who reported difficulties when making their claim for UC identified a range of issues including; problems with verification, technical limitations and a lack of knowledge or support.

One key issue mentioned was delays with the verification process. Participants mentioned a degree of confusion surrounding what they needed to bring to the Jobcentre Plus in order to be verified when making their claim. In addition to this, participants reported issues with the Jobcentre Plus being able to transfer data relating to their legacy benefits.

Going from sickness benefit to Universal Credit, I would have thought I wouldn’t have to tell all my details again and prove that I’d been sick - Male, 45-64

Another issue raised by participants were problems with internet access and in being able to complete the forms online. Those who did not own a computer said they needed to go the library to complete their application. Lack of skills or confidence with completing an online form was a further barrier for some who said they relied on their Work Coach or a friend or family member to help them. This issue was most commonly reported amongst older participants.

As I said, me and computers do not go on. Luckily, I had my friend to do it for me, I sat next to him and I told him things - Male, 45-64

Confusion around how to claim and a lack of access to support were identified as barriers for those who were amongst the first to claim UC in their area. These participants said that limited knowledge amongst Jobcentre Plus staff did not always know how to help them and that both formal and informal support options were limited. There were also cases of long waits to meet with a Work Coach which caused delays in completing the claims process.

I went online and claimed, and they make you an appointment, but they obviously didn’t make an appointment until the following month, so that month is already in arrears - Female, 45-64

There were also some issues raised about the length of time it took for claims to be processed and for the first payment to be made. While most participants reported that their first payment was made around 6 weeks after application, others, particularly those who claimed early in the roll-out process, said that they had waited longer than this.

I had to borrow, I think I got £400 from them, £500 maybe, but it wasn’t enough to last for five to six weeks with two children. So, it was very difficult I had to borrow a lot of money, and I’m still feeling that effect, still not managed to get completely on my feet - Female, 25-44

Case Study 7

David had been on ESA, however, following an operation he was considered fit for work. David then proceeded to claim UC to replace his ESA. In order to receive UC, David had to prove that he had been unwell and unable to work. He had assumed that both systems would be linked up and reported feeling frustrated that this was not the case.

3.2.2 Impact on financial circumstances

The period between making a UC application and receiving a first payment was often described as a time of significant financial strain for tenants who were had often experienced a reduction or loss of other income. Their ability to keep up to date with their bills and rent payments during this time depended on whether the participant had:

• other sources of income
• access to formal or informal financial support
• existing debt
• a good understanding of the UC system

Alternative income included those who were still in work whilst their claim was processing, those who were still receiving other benefits and those who had savings they could use. Participants who had another source of income while they were waiting for their first UC payment were less likely to get into rent arrears.

I lived off my son’s PIP, my Carer’s [Allowance] and [child benefit], it was stressful, but I coped - Female, 45-64

One of the key forms of financial support mentioned by participants was money loaned or given by friends and family. Participants felt comfortable with this because they would not have to pay interest on money borrowing and, in some cases, did not need to repay it at all. Participants who did not have access to informal support sometimes applied for a formal loan instead.

They’re more relaxed, like one family member, I borrowed 500 quid in one go. But they’re more relaxed because I’m family and they know I won’t runaway, that I will pay it - Male, 25-44

My gas and electricity would have run out if it weren’t for the generosity of my friends and family - Male, 45-64

Another form of financial support that was available to tenants was the advance payment. Participants generally found out about this through their Work Coach at the Jobcentre Plus and were told that they would need to pay it back. Often participants were happy to take up this offer and were grateful that it was available as it meant they were more able to keep on top of their rent payments and other outgoings.

However, participants did express concern about how much they had to pay back each month following their first UC payment.

Others were reluctant to accept the payment as they did not want to add to their debts. There were also participants who were not aware this payment was available or were told this was not available to them.

It’s quite useful when you need help in emergencies because they actually did help me out quickly that day - Male, 25-44

They were offering us £800, but there was no way I was taking it. Why would I take that and get myself into more debt? - Female, 65+

Similarly, previous debts also contributed to a participants’ ability to keep up with their financial responsibilities. In some cases, participants had already developed debts either prior to claiming or during their claim for UC. These debts included loan repayments, rent arrears and other utility bill debts. The financial strain of rent arrears was exacerbated by having court orders in place which required participants to pay a certain amount of rent each month. These previous debts contributed to a participants’ inability to continue paying their rent and other bills.

Participants financial circumstances were worsened in situations where they had limited understanding of their UC claim. Participants recall being confused about what money they had to pay to the landlord and what UC would cover. This was particularly the case amongst those who had been claiming Housing Benefit previously and weren’t used to paying their rent themselves.

All I knew was [that the landlord] had been in contact by UC and vice versa, but nobody sent me a letter saying, ‘You’ve got to pay Bedroom Tax,’ so I was unaware for about two, three, four months. Then, all of a sudden, I get a letter, ‘You’ve got to pay Bedroom Tax, you owe x amount of money,’ which I knew nothing about - Male, 45-64

As demonstrated, there are various factors which can impact on participants’ abilities to pay their rent while waiting for their first claim. Amongst those who experienced a strain on their finances, participants reported that their quality of life had declined, and their mental health had deteriorated.

In some cases, participants said they needed to cut back on treats for the family such as takeaways and activities for the kids. Others found themselves in much more challenging circumstances which meant they were unable to pay for essentials such as food and needed to rely on food banks during this time.

My finances were hugely impacted. I went from being comfortable, never in arrears, never being short of anything, to not having any money for anything and having to borrow money off my family…it was embarrassing - Female, 25-44

There were no more little luxuries, it wasn’t fair on my son… [I had to], spread [the money] out, there was no more McDonald’s or clubs to support him [son] - Female, 45-64

In addition, participants reported that the financial strain they experienced had a negative impact on their mental health. This issue was more common amongst those who had had a pre-existing mental health condition.

Case Study 8

Prior to claiming UC, Jack was working as a delivery driver. Before this he had been unemployed due to health issues and had built up rent arrears, council tax debt and water bill debt. During the five week claim period, these debts limited Jack’s finances, meaning that it was difficult for him to keep up with his rent payments.

Case Study 9

Dennis was not working due to his depression and anxiety. In June 2017 he was asked to complete a disability assessment. Following this he was informed that he was considered fit for work and his ESA would stop. This is when he began his claim for UC.

The claim process had a negative impact on his mental health as he found it stressful and he was under financial strain. Dennis’ rent arrears worsened, and he needed to rely on food banks during this time. Whilst making his claim, Dennis was also going through an appeal in order to be considered ‘unfit’ for work.

Dennis reported that the UC claim, in combination with his appeal had a detrimental effect on his mental health.

3.2.3 Management of rent payments

Participants were generally happy if their rent payment arrangements remained the same or similar to those they had before claiming UC. Those who did not manage rent payments had no desire to do so and those who previously paid rent directly to their landlord wanted to continue this.

Alternative Payment Arrangements were offered to tenants if they met certain criterion. Amongst these participants, there were those who had a Managed Payment to Landlord scheme (MPTL) in place. This scheme was either offered to participants by their Work Coach, or they requested it themselves.

The scheme was viewed particularly positively by those who had previously received housing benefit which went directly to their landlord. These participants felt more comfortable with this arrangement as it meant they would not fall behind on their rent as a result of prioritising other outgoings.

They just gave me the choice - do you want it in your account, or straight to your landlord - that was easy for me, I wanted it straight to my landlord… I’d been in arrears before, so I didn’t want that hassle again - Female, 25-44

I thought that would be better because if you have it in the bank and you think, ‘I’m not going to pay that, I need something more important, like gas or electric,’ so I thought it’d be best to pay it to the landlord, that was the best option. I think every Universal Credit payment should be paid directly to the landlords, not to the person. This is why people are getting so much in debt and evicted - Male, 45-64

Participants that had previously paid their rent directly to their landlord and were not placed on the MPTL scheme were also content with this outcome. Again, this is because it remained consistent with their previous rent payment arrangements. This group of participants expressed feeling confident and able to pay their rent themselves, given that they had had previous experience of this.

Oh, I’m absolutely fine with it [being responsible for housing costs]. I’m not saying 100% that I pay it on time all the time, but first thing I look to do is pay rent, then pay electricity, then do a big shop, and then that’s me set for the month - Female, 45-64

However, there were also participants who had previously had their rent paid directly to their landlord via housing benefit who, following their claim, needed to pay their rent themselves. This group expressed frustration and were concerned that they would be unable to budget and make sure that their rent was paid on time each month.

Participants who were in rent arrears after claiming UC, had repayment plans in place to deal with this.

Often, repayment plans were put in place by the landlord. Participants who had these repayment plans in place had to contribute a set amount towards their rent arrears each month. In some cases, participants had discussed what amount they felt was feasible per month with their landlord and agreed upon this. Participants in this situation reported feeling comfortable with this approach as it felt more manageable, and in turn, these tenants were more likely to repay their debt.

They suggested I pay back £16 per month, which I was delighted with, I thought it could be much more… I just add it on when I pay my rent each month, but I pay a bit more than that and round it up to £400 from £382 - Female, 25-44

Reaching the arrangement was very easy, they [landlord] made it easy to sort out and the payments weren’t that much………..it was very annoying to fall into the debt, but it’s been manageable to try get it back - Female, 65+

As long as you pay something, £10 to £20 here and there, is fine and it helps me and makes it less stressful - Female, 45-64

Other participants had more formal repayment plans in place, for example, court orders. This was more common amongst single men and those who had a history of rent arrears prior to their UC claim. Having a court order in place did increase the financial pressure that the participants were experiencing, however they were aware that they had to pay this each month and so were more careful to budget.

Case Study 10

James was in rent arrears prior to making his UC claim. Previously he had been threatened with eviction, however he was able to remain in his property by agreeing to a court order to repay £50 per month. James’ landlord requested that the MPTL scheme was in place due to his history with rent payments.

3.3 Information

3.3.1 Understanding of Universal Credit

Prior to claiming UC, participants’ knowledge of UC, including how it would work, what they would be responsible for and how their rent would be paid was very limited. Moreover, they were unlikely to proactively seek out information about UC. Those that did were likely to visit the DWP website.

Instead, most information about UC was attained passively, either by word of mouth through friends and family who were already on UC or via the media. Several tenants noted the negative reception of UC in the news and recalled being worried about going on to UC as a result of this.

I didn’t do my own research, I had my own issues… it was in the news because it was failing, not because it was succeeding - Male, 45-64

Since making their claim and being on UC, participants knowledge of Cincreased. Once participants had had time to become accustomed to the changes, they felt more confident.

I’ve been on UC for a while now, I feel like I know everything about it. I had a good jobs coach and they’ve told me a lot about it - Female, 25-44

Despite this increase in confidence, there were participants who felt frustrated with various elements of UC. As mentioned, this includes those who wanted their rent to be paid directly to their landlord rather than having to pay their rent themselves. There were also participants who mentioned that receiving one monthly payment made it far harder to budget than receiving their benefits weekly / fortnightly as they used to.

Even if I was getting wages monthly, having that little bit weekly would be so much better, because you run out of stuff, you can only top up so much on the meters as well you’ve got to make this money stretch and it’s so, so difficult. I get paid every four weeks from work, and on the 25th of every month from UC, so I have no consistent money - Female, 25-44

In contrast, other participants were content with receiving their UC payments on a monthly basis. Participants report that these monthly payments have made them more aware of their finances and had encouraged them to budget more effectively.

I changed it [rent due date] to the closest I could get to the day I get paid each month…they told me ‘you tell us when you want to pay your rent’ so I told them the day after I get paid. Now I know I’ll always have enough for rent on that day - Female, 25-44

3.3.2 Support needs

Primarily Work Coaches acted as the key gateway to receiving information about UC. As such, tenants tended to ask their Work Coach numerous questions about UC and they generally received a helpful answer.

Participants did recall, however, that when UC was first being rolled out, Work Coaches were less well informed thus making the claim process more difficult, as they were less able to answer questions or provide guidance.

Landlords were also an important source of information. Participants tended to have good relationships with their landlord, especially in cases where their landlord was understanding of their circumstances and were willing to put an informal repayment plan in place when it came to paying back their arrears. Landlords were also able to offer tenants information on how their rent payments would work and, in some cases, they made house visits to explain this in person. Having these informal visits put the participants’ mind at ease and they said that having a positive relationship increased their motivation to pay back their arrears and keep to their repayment plan. There were no distinct differences between participants whose landlord was a housing association and whose landlord was an Arms-Length Management Organisation.

We were lucky because [landlord] were understanding about our situation. They said because of the delay they would put everything on hold until the first UC payment came though, and they would put a re-payment plan in place, to make up for the arrears - Male, 25-44

Other forms of support included:

• Citizen’s Advice; this source of information was used when tenants had queries about UC and financial support available during the claim process
• Turn2Us helped participants find out if they were eligible for UC and provided information on the claim process
• UC pages of the GOV.UK website helped

Broadly speaking, tenants found support in person was most helpful as they could ask a specific question that related to their situation and receive an immediate answer.

Someone with a face, in an office somewhere, where you could go and say, ‘This isn’t my problem, how do I do this?’. It used to have a dole office, you used to go there, and you’d say, ‘They’re not paying my rent’, or ‘I need my landlord to do this and he won’t do it’. You had someone to go and talk to. Universal Credit’s a bit faceless - Male, 45-64

Participants felt that there should be more information readily available on what forms of financial support are available to them during the claim process. It was suggested that this information could be advertised on posters and in leaflets in the Jobcentre Plus. They noted the importance of advance payments and emphasised the need to ensure that everyone making a claim for UC is aware they are available.

In terms of support, participants said that having greater clarity on what UC would entail may have helped them to avoid being in arrears. In many cases got into arrears or their arrears worsened because they were unsure about certain elements of UC. This included a degree of confusion or lack of information on:

• whether UC would include support with their housing costs
• who would be responsible for paying rent to the landlord
• how much they needed to pay their landlord directly

Participants said that if they were provided with this information, they would have been less likely to get into arrears. Again, receiving this support through their Work Coach or landlord was thought to be most effective.

The first payment was a fair amount of money and I thought, right that’s caught up with the three months when I wasn’t receiving anything, so I did nothing about it. And then I got an eviction notice. And when I phoned or went down [to the Jobcentre Plus] they told me you’re supposed to pay your rent from that money. They never told me it was my prerogative to go and pay out of the money they’d given to me - Male, 45-64

I know it [UC] now, but it was back then I needed to know about it - Male, 25-44

I still think it’s complicated, they need dedicated people to break it down for people… we didn’t know what it [UC] really was. We knew it was benefits, but didn’t know it would be different [from Housing Benefit] - Female, 65+

Lastly, support for people in vulnerable situations was believed to be limited. Vulnerable tenants included those who; had limited social networks, were not technology literate, had a low income and / or had issues with their mental health. Participants believed that these issues should be identified at the beginning of the claim process. Participants who were experiencing poor mental health believed that this made it more challenging for them to deal with the application process and cope with any financial pressure while waiting for their first payment. Participants who were not IT literate or did not have access to a computer believed they should be given support using a computer in the Jobcentre Plus.

4. Key messages

This report brings together the findings and key messages from research with landlords and their tenants in the Social Rented Sector to help understand UC and the patterns of rent balances.

4.1 From the landlord interviews:

• pre-claim work: encourage prospective tenants to apply for UC if eligible/appropriate and encourage to ask for an Advance if required (helping with 2 week HB run-on too), pay rent in advance (3 in 6 tenants) – from 2 week’s to a month’s rent, ensure housing is affordable for the tenant. Caveat is that for some the tenants are coming over with pre-existing arrears and are vulnerable so not much can be done
• support for tenants: check housing size is appropriate (avoid under- occupation and RSRS), look to reduce utility bills, automated texts/SMS’s, drop-in clinics/surgeries, Employability and Training programmes, help with digital access and making UC claims. + Internal training for staff on how UC works
• Housing and Arrears management: can be challenging when an LA first went live, ‘steep learning curve’, differences here between landlords with some going for those with low-levels of arrears, some going for the higher levels. Cash flow issue so most are happy arrears will stabilise and start to fall but using triage systems to identify which tenants need support/intervention helps but requires considerable resource input. Main thing is communication of change from legacy to UC with tenant having to pay their rent themselves – culture change. Direct Debits useful but not possible for all Landlords to implement. Language/terminology change for Manchester landlord to make tenants realise ‘arrears’ means a ‘debt’ – ‘you owe us money for your rent’, working out who is on UC is challenging, variable incomes on UC is also a challenge especially if on partial housing and/or an APA. Issues of rent arrears conflated with vulnerabilities and complex needs of the tenant groups such as Eastern European, mental health issues, geographical location, digital literacy and suchlike

• approach to APA’s: Mostly all avoiding except for cases of significantly high arrears or tenants refusing to engage with the landlord. Time it takes to put an APA in place you might as well do something about the tenant yourself (in- house) – 11 week wait. Hard to get tenants off of APA’s. Would prefer tenants to pay directly to them (culture change). Some differences in APA usage, but some recent changes to APA practices at the time of the interviews. Deductions? Some very happy to use some refuse…

• Landlord Portal – ‘portal is a godsend’ ‘Like all Christmases came at once’. Mostly all find APA’S much easier and coping with UC much easier since introduction of the Landlord Portal. Several constructive practical/operational suggestions including being able to administer their own staff as users, and if it could collect claimant/tenant email addresses and mobile numbers so that the Landlord can have key contact details for the tenant

4.2 From the tenant interviews:

• financial stability had the greatest impact on ability to pay rent, prior to claiming UC. Previous receipt of housing benefit and financial management skills also had an impact
• tenants claimed UC as a result of a change in income and/or a change in the benefits they were eligible for
• tenants were prompt in making their claim, however there were those who delayed making their claim due to uncertainty and a lack of knowledge
• in some cases, tenants found the claim process straightforward and without delays. For others, delays arose due to issues with verification, IT issues and a lack of knowledge and / or support
• tenants experienced a degree of financial strain during the claim process. This was mitigated by the availability of financial support, alternative income, previous debt and the level of understanding of their claim
• Alternative Payment Arrangements were viewed positively by Tenants, however, there were frustrations amongst those who had previously had housing benefit paid directly to their landlord, and now how to pay their rent themselves
• both informal and formal repayment plans were in place to help tenants make repayments if they had been in rent arrears
• prior to making their claim, tenants recalled having a limited understanding of UC, but this improved over time
• landlords played an important role in the claim process as they were able to answer queries relating to their rent payments and appeared to be understanding if tenants found themselves in arrears
• in terms of support, more information is needed, prior to making their claim, about how UC works, including who will be responsible for rent payments
• specific types of tenants were identified as vulnerable when making and managing a claim which meant they might need additional support

Annex A - The Social Landlords (at the time of the research)

Curo

Based in Bath. Provides homes and care and support services across the West of England Over 25,000 customers and more than 13,000 homes - one of the largest landlords in the South West:

• HMS: Aareon QL
• Type: Housing Association
• Area/Region: South West

Full Service roll-out: May 2016

Support homeless, young people and families, older and disabled people, and those affected by mental health issues or memory loss.

Also help customers into education and work, and offer apprenticeships, training and graduate programs.

No paid shareholders - profit for purpose, reinvesting the surpluses from commercial house-building and lettings businesses into core social purpose.

Dudley MBC

30 Different Housing Associations work with Dudley to meet housing needs and build stronger communities across the borough. The Dudley Housing Partnership is a group made up of social housing providers operating in Dudley.

Dudley Council’s housing stock: 22,490 Total of Housing Stock for 30 HA’s: 4,760 Full Service roll-out: July 2017

• HMS: Bespoke
• Type: Local Authority
• Area/Region: Midlands

GreenSquare Group

Formed in 2008, GreenSquare Group is a major provider of housing, regeneration, care and support and commercial services across Wiltshire, Oxfordshire and Gloucestershire.

Oxford Citizens HA, now part of the Greensquare Group took part in the Direct Payment Demonstration Project DWP ran between 2012-13.

• HMS: Orchard
• Type: Housing Association
• Area/Region: South West

Full Service roll-out: May 2017

Northwards Housing

Northwards Housing is a not-for-profit ALMO (arms length management organisation) that manages over 13,000 City Council homes across areas of north Manchester.

• HMS: Aareon QL
• Type: ALMO
• Area/Region: North West

Full Service roll-out: October 2017

We will make a difference in north Manchester by helping to make it a place where people choose to live, learn and work. Affordable, energy-efficient homes and strong community pride will make our neighbourhoods thrive. - Northwards’ vision

Notting Hill Genesis

Notting Hill Housing from 196 to 2018, and have now merged with Genesis Housing Association to become Notting Hill Genesis. A member of the G15 group of major housing providers in London and the south-east.

Both Notting Hill Housing and Genesis were founded in response to homelessness and poor living conditions.

• HMS: Northgate
• Type: Housing Association
• Area/Region: London
• Full Service roll-out: November 2015

Around 55,000 homes across London and 64,000 across London and the south-east, housing 170,000 residents in total. Half of our properties will be general needs homes with social or affordable rents. Will be the third largest registered provider of social housing in London. Will be the fifth largest registered provided in England, measured by homes managed. Will be the largest provided of shared ownership in England - Notting Hill Genesis

Tai Tarian

Formed in 2011. One of the largest social landlords in Wales and have responsibility for over 9,000 properties across the Neath Port Talbot County Borough.

• HMS: Aareon QL
• Type: Housing Association
• Area/Region: Wales
• Full Service roll-out: October 2017

We are committed to providing good quality housing and a range of services to help people manage their homes. Tai Taian is run by a voluntary Board made up by tenants, council nominees and independent members.

Together Housing

One of the biggest housing associations in the North of England with over 38,000 homes, mainly across the Yorkshire an Lancashire areas.

• HMS: Aareon QL
• Type: Housing Association
• Area/Region: North West and Yorks and Humber

Full Service roll-out: December 2017

Together Housing is a non-profit making organisation and any money made is invested back into the association for the benefit of its residents and local communities.

As well as houses to rent, Together Housing also build and manage homes for sale, sheltered accommodation and extra care.

In June 2013, Newground became a member of the Together Housing Group (Newground together). Collectively they fund lots of voluntary group and community projects to help improve life and opportunities for work for local people. The group’s shared vision is ‘to make a better future, together’.

Your Homes Newcastle

An arms length management organisation (ALMO) responsible for managing council homes on behalf of Newcastle City Council. Set up in 2004 to manage council properties, to improve housing in order to meet the Government’s Decent Homes standard, and to provide a range of support services for Newcastle City Council.

• HMS : Northgate
• Type: ALMO
• Area/Region: North East
• Circa 3,000 on UC
• Full Service roll-out: May 2016

Currently manage:

• 26,700 council homes on behalf of Newcastle City Council
• over 700 homes on behalf of Leazes Homes
• also manage 1,500 leasehold properties on behalf of Newcastle City Council

Structure: In October 2015, YHN established a new company structure. Asfaleia Limited is their charitable subsidiary and Abri Trading Limited is their trading subsidiary.

Annex B - Method

This research consisted of 42 telephone interviews with tenants across seven different landlords. These landlords included; Dudley MBC, GreenSquare Group, Northwards Housing, Notting Hill Genesis, Tai Tarian, Together Housing Group and Your Homes Newcastle.

These interviews were conducted in two stages, with the first taking place between the 30th April and 3rd June, and the second taking place between the 4th November and 23rd January.

Participants were recruited based on sampling criterion; a full outline of the achieved quotas is included in the table below.

Primary quotas for 42 telephones interviews

		Achieved quotas
Landlord	Together Housing Group	6
	Tai Tarian	5
	Northwards Housing	7
	Your Homes Newcastle (stage 2)	6
	Notting Hill Genesis	7
	GreenSquare Group	5
	Dudley (stage 2)	6
Household type	Single, no child dependents	12
	Couple, no child dependents	4
	Single, with child dependents	14
	Couple, with child dependents	8
Arrears before claiming UC	In arrears before claiming UC	20
	Not in arrears before claiming UC	21
UC Conditionality Group	Searching for work	17
	Working – with requirements	9
	No work requirements	6
	Working – no requirements	7
	Preparing for work	2
	Planning for work	1
Length of time claiming UC	Less than six months	8
	6-12 months	15
	More than 12 months	19
Gender	Male	15
	Female	27
Age	18-24	3
	25-44	22
	45-64	16
	65+	1
Long-term condition or disability	Yes	14
	No	28
Gap between end of HB and start of UC	60 days or more Less than 60 days	22>br20

Qualitative topic guide

Introduction

Welcome orientates participant, gets them prepared to take part in the interview. Outlines the ‘rules’ of the interview (including those we are required to tell them under MRS and GDPR guidelines):

• Thank participant for taking part.
• Introduce self, Ipsos MORI: independent research organisation (independent of Government), we adhere to Market Research Society code of conduct that ensures our research is carried out in an ethical and professional manner. Outline the research. We are speaking to 48 tenants who rent from one of eight landlords.
• Explain that we will be talking about their UC claim and how their rent payment was or was not impacted at this time.
• Explain their role in the research: We want to understand their circumstances before claiming and during their claim. As well as developing an understanding of how you supported themselves in this time and what other support was available to them. This study will help DWP to understand how you can better support these tenants.
• Confidentiality - reassure all responses are anonymous and that identifiable information about them will not be passed on to anyone, including back to DWP or any other Government department.
• Remind them that their participation in this research is completely voluntary and you are able to stop at any point or move on from a question. Also, reassure participants that taking part will not affect their relationship with DWP, nor their benefits.
• Length: 45 minutes.
• Get permission to digitally record – transcribe for quotes, no detailed attribution.
• Any questions before we begin?

Background

Timing - 2-3 minutes

Notes - Warm up participant.

Gain an understanding of the respondent and their household

To start with, could you tell me a little bit about yourself? PROBE: How long have you lived there? Who do you live with? Do you have children? How old are they?

Are you working at the moment? What kind of work do you do? PROBE: Full time/ part time? Hours worked? Length of time in employment?

Tenant’s circumstances before claiming UC and their awareness and understanding of UC before making a claim. Avoid comments surrounding problems with landlord more specifically.

Timing 10 minutes

Notes - Gather information on their circumstances prior to claiming UC and their level of understanding of UC before making the claim. Avoid comments surrounding problems with landlord more specifically.

Were you in work before you claimed UC?

• If yes, where were you working at this point? How many hours were you working?
• Where were you living at the time? PROBE: Is this different to where you live now?
• How long had you been living there? How long had you been a tenant to your landlord?
• Had you experienced any changes to your income before claiming UC? PROBE: Did your income increase or decrease? Why did this happen? Is your income seasonal / variable?
• Which, if any, benefits or tax credits were you claiming? Were you receiving any other forms of support? PROBE: At this point, did you feel able to keep on top of your bills/outgoings?
• [If they received Housing Benefit] Did you receive your Housing Benefit directly from the local authority themselves?
• Before claiming UC, how were you rent payments paid? Were they covered entirely by you, did you receive a top-up or was this covered entirely by financial support?
• Before claiming Universal Credit, were you in advance, balance or arrears with your rent payments? PROBE: Why was this?
• [If in advance] Who handled this? PROBE: Landlord or they sorted it themselves
• [If experienced arrears] Could you tell me a little bit more about why this was? How did you handle this? PROBE: Were you still in arrears when you claimed UC?

Before making the claim, what did you know about UC?

• What did you think it would involve? PROBE: Where did you get this information from?
• What did you know about how housing costs are managed under UC? Were you aware that housing costs would be included? How did you know about this?
• Did you think that the way you pay rent would be different? If yes, why did you think this?
• What did you know about the claim process?
• Did you use any other sources to get information on UC? Where did you get your information from? PROBE: friends/family, GOV.UK, impartial bodies, their landlord, social media.

Circumstances, understanding and behaviour when UC claim was made

Timing 10 minutes

Notes - This section will explore their circumstances at the time of the claim. As well as whether you delayed making their claim or if there were delays with the claim process and how this impacted them.

Please note that the participant may struggle to recall the exact triggers.

Explore their circumstances at the time they made the claim and their claim journey

What were your circumstances at the point you made your claim?

• PROBE: work, income, personal circumstance. Explore reasons for any changes.

Explore their experiences of making the claim:

• When did you make this claim? PROBE: Any mention of removal of spare room subsidy?
• How did you go about making the claim? Did you receive any guidance on this? Who from?
• What was your main reason for making the claim? PROBE: work, income, personal circumstance, other form of change in circumstance, changes to other benefits / tax credits
• How quickly did you make your claim following this? Was there a delay in making your claim? [If there was a delay]
• How was your financial situation impacted during this time? [If their pay is seasonal / variable] How did this have an impact?
• Did this have an impact on your rent payments? Did you tell your landlord about this? -*resources did you access? Friends/family, loans, impartial advisers?
• [If they took out a loan as a result] What type of lender did you use? Probe: mainstream, door step, informal/shark

Explore their claim journey (once it had been submitted)

• How long did your claim take to process?
• Were there any delays? Why was this? PROBE: more specifically, was it the housing element that was delayed? Alternatively, how, if at all, was the housing element impacted by the delays?
• How was your financial situation impacted during this time? Did this have an impact on your rent payments?
• What was your overall experience of the claim process?

Have you ever heard of ‘advance payments’?

• What do you think is meant by ‘advance payments’?
• Have you received an advance payment in the past? If so, who offered this? Or did you ask for one? At what point during the claim did you receive this?
• If you did not receive an advance payment, why was this? PROBE: not offered/turned down
• Did you understand the process? Were you aware that you would have to repay it?
• What was your experience of this? If applicable, did the advance make a difference to your arrears status?

Understanding of UC claim and housing costs

Timing 10 mins

Notes - Gather information on their understanding of UC at the time of the claim and how UC has had an impact on them.

When you first made your claim, what did you know about Universal Credit?

• Were you aware that you would be responsible for managing your housing costs?
• [If yes] How confident did you feel about managing housing costs when you first received payments? Why was this? PROBE: Did your income impact on how confident you felt?
• Were you aware of ‘Alternative Payment Arrangements’ (APAs)? If so, where did you get your information from on APAs? PROBE: What types of APAs have you heard of ie advances, more frequent payments and managed payments to landlords?

Have there been any changes to the way your rent is charged since you went onto UC?

• What changes have you seen? Were you told about these changes? How?
• Have these changes impacted you in anyway? How?
• (If they hadn’t been in rent arrears prior to claiming UC) Did you get into rent arrears after claiming UC? Could you tell me a bit more about why this happened? PROBE: Did you need to prioritise other spending?
• (If you had already been in rent arrears before claiming UC) Did your rent arrears stay the same or get worse? Could you tell me a little bit more about why this happened?

[If in rent arrears]:

• How has this changed over time? Has it improved or worsened?
• Did you have an informal payment agreement in place with your landlord? How well did this arrangement work?
• And have either you or your landlord applied for an Alternative Payment Arrangement? If yes, do you know what type of arrangement this was? PROBE: Are you aware of why this was put in place?
• [If they have both an informal arrangement and APA in place] What was the impact of having both of these?
• If you do have an APA, what is your experience of this? How has this had an impact? [If they are in rent arrears] How has the APA impacted this?
• Has your approach to managing housing costs changed during your claim? PROBE: How straightforward was this?
• Do you feel that you understand your UC claim now? Which areas need clarity?
• Do you think there is any information missing? What would be helpful for you? PROBE: what format should this information be in? Who would you want it to come from? Any information missing on APAs?

Explore support needs, who could address and how

Timing 5 minutes

Notes - Explore ways that tenants could be supported.

Explore the information on UC that they had available to them [IF NOT ALREADY EXPLORED]

What information have you accessed in the past?

• Who was this information from? PROBE: DWP, landlord, third parties, online / social media?
• Did you find this information useful? If so, how did it help? PROBE: understand examples of this
• How could the support available be improved? PROBE: Have you received a discretionary housing payment? If yes, was this impacted by UC?

What support/ information would have been most helpful for you at the time of making the claim?

• When, specifically, did you need this?
• Who would you want/expect this information to come from? PROBE: DWP, landlord?
• Why was this help needed? PROBE: examples
• What difference would having this information have made to you?

Conclusions

Timings 5 mins

Is there anything else that you wish to mention that has not already been discussed? If you could mention one thing to DWP about how to support tenants in the process of claiming UC, what would it be?

Thank participant; explain the next steps (eg what DWP will do with the findings).

THANK AND CLOSE. Reassure about confidentiality.

Annex C References

Direct Payment Demonstration Projects: Key findings of the 18 months’ Rent Account Analysis exercise and Key findings of the programme evaluation

Universal Credit: research with single claimants, including those with housing costs

Universal Credit test and learn evaluation: familes (RR944)

Annex D - Key definitions and glossary

ALMO landlord	Arm’s-Length Management Organisation
Analysis period	Most analysis in this paper tracks cohorts of tenants over time. From up to 12 months pre-UC to the most recent record which could be up to X years after the claim.
APA	Alternative Payment Arrangement
Arrears proportion	Total outstanding balance as a proportion of average weekly rent amount over the analysis period.
CA	Carer’s Allowance
DLA	Disability Living Allowance for working age disabled people
DWP	Department for Work and Pensions
ESA	Employment and Support Allowance available to claimants who have a disability or health condition which how much they can work
HA landlord	Housing Association
HMRC	HM Revenue and Customs
IS	Income Support – available for eligible working age people who are not signed on as unemployed. They can be pregnant, a carer, lone parent with a child under 5 years old, or sick or disabled
JSA	Jobseeker’s Allowance is an unemployed benefit claim whilst a person is looking for work
LA landlord	Local Authority
MPTL	Management Payment to Landlord
NBD	National Database
NINO	National Insurance Number
PIP	Personal Independence Payment – replaces DLA
PRS	Private Rented Sector
Rent Arrears	For the purposes of this report, any outstanding rent balance (> 0) is defined as “arrears”.
Rent balance	Total outstanding balance on rent account. Includes some charges not covered by HB or UC, but these are not thought to be a large issue.
RTI	Real Time Data
SHBE	Single Housing Benefit Extract
SRS	Social Rented Sector
UC	Universal Credit
UCFS	Universal Credit Full Service is the digital service and as of December 2018 is available to all types of claimants across the country. Universal Credit Full Service claimants will have an online Universal Credit account to manage their claim. They will use their account to report changes, send messages to their work coach and find support.
UCLS	Universal Credit Live service was launched before the UCFS and was initially available to all single people across Great Britain, who were not in a full service area and couples and families with children in certain areas. Universal Credit live service recipients will manage their claim by telephone. See - Universal Credit: full service and live service
UCOS	UC Official Statistics

1. The GreenSquare Group completed a merger with Accord Housing Association to create GreenSquareAccord in 2021 and is now known as GreenSquareAccord. ↩

2. Northwards Housing ceased to be an ALMO and was re-absorbed into Manchester City Council’s housing operations service in June 2021. ↩

3. Rent arrears at the UC claim are reported by the landlords of claimants living in the Social Rented Sector as part of the rent verification process. ↩

4. This is to ensure consistency with the results of the initial analysis with one social landlord, but was subsequently found to be unnecessary as data from any housing management system could be used. ↩

5. Provisional Statistics from Stat-Xplore reported in August 2020. ↩

6. GreenSquare Group completed a merger with Accord Housing Association to create GreenSquareAccord in 2021 and is now known as GreenSquareAccord. ↩

7. Northwards Housing ceased to be an ALMO and was re-absorbed into Manchester City Council’s housing operations service in June 2021. ↩

8. This research consisted of two waves. The wave in question (wave 2) included 1,004 interviews with Universal Credit claimants. This fieldwork took place between 31 July 2017 to 13 September 2017. ↩