Since the government first introduced the notion of housing benefit
payments being made directly to tenants instead of landlords, many
social landlords have been concerned about the prospect of rent
arrears building up. Most believe this would happen as a result of
vulnerable tenants finding it impossible to manage their finances.
In an attempt to sooth landlord concerns, Lord Freud, minister for
welfare reform, has clarified things by stating that any tenant who
falls behind more than two months with their rent payments will have
their direct payments suspended. Once a tenant has paid off their
arrears, direct payments would resume once again. Landlords would
hopefully recover their money within nine months.
Lord Freud Comments
Speaking to delegates at the Chartered Institute of Housing’s annual
conference, Lord Freud spelled out the measures the government would
put in place to try and help tenants if they fall behind after one
month of direct payments:
“Options at this point could include a reassessment of an
individual’s financial capability, a possible move to managed
payments, or possibly extra support to get the individual on the
right track to prevent the accumulation of further arrears.”
Government is Confident Tenants Will Pay
Despite scepticism from social landlords, the government is convinced
that the majority of housing benefit tenants will be able to manage
their finances and pay their rent on time. They suggest that only
about 20% of tenants could fall into difficulties. Of course, whether
this estimate is proven to be correct remains to be seen, as the
direct payment scheme has yet to be rolled out nationwide.
