Fears new benefits system could hit landlords

Landlord Colin Campbell
Landlord Colin Campbell

South Tyneside could be hit with thousands of pounds worth of rent arrears as the benefit system is set to change

In February, a new Universal Credit system is being rolled out across the borough, which will see housing benefits being paid directly into tenants’ bank account, along with any other benefits they may be receiving.

It will be a disaster.

Colin Campbell

It will then be the tenant’s responsibility to pay their rent themselves instead of the current system which sees it delivered directly to their social or private landlord.

Private landlord Colin Campbell believes the new system won’t work and council bosses are organising support for those struggling.

Mr Campbell said: “I am genuinely concerned and am not saying that all tenants will be irresponsible, but I know for a fact many will.

“I believe this could see arrears mounting into thousands of pounds for 
both private and social landlords.

“Suddenly a person is going to find themselves with a chunk of money in their bank, and it will be up to them to decide what to do with it.”

He added: “Especially at times like Christmas, if it’s a case of pay the rent or buy some presents, I can see exactly what’s going to happen in some cases.

“What’s the local authority going to do? Just let the rent arrears build up? Will they evict them if they don’t pay up? We 
could be seeing an 
awful lot of people out 
of pocket and others potentially homeless.”

Council bosses say they, along with South Tyneside Homes (STH) and other key partners, are working closely with the Department for Work and Pensions.

The system also includes an ‘alternative payment arrangement’ which enables landlords to ask for housing costs to be paid directly to them

A council spokesman said: “South Tyneside is in the fourth and last phase of the roll-out programme 
and we will see our first claimants move onto Universal Credit from February 22. The council, STH and key partners are working closely with the DWP 
on the implementation of this new benefit as well as learning from neighbouring local authorities who have gone live.”

“One key feature of Universal Credit is the alternative payment arrangement system. This gives landlords the ability to ask for the 
housing costs element of Universal Credit to be paid direct to them instead of the tenant. This can be a helpful way of helping tenants avoid court action or, worse still, losing their home if they don’t 
pay any or all of their rent 
on time.”

However, Mr Campbell says the alternative payment arrangement comes with a risk.

He said: “Landlords can ask for the benefit to be paid directly to them after arrears have built up and triggers have been reached.

“Most landlords have monthly mortgage payments to cover. We can’t go for months and months covering these costs until the rent is eventually recovered. It will be a disaster.”

Anyone with concerns should call the Welfare Support Service for advice on 0300 123 6633.