South Tyneside’s £800,000 arrears pressure from Universal Credit tenants

Universal Credit is being blamed for over �800,000 in arears
Universal Credit is being blamed for over �800,000 in arears

Housing bosses in South Tyneside are owed nearly more than £800,000 in arrears from tenants on the controvertial new Universal Credit benefits system.

Since the new benefit system was rolled out in the borough in May, there are now more than 1,400 people currently claiming Universal Credit - with total arrears of £819,575.

The figures were revealed at Hebburn’s Community Area Forum in an update from South Tyneside Homes bosses.

The figure covers arrears owed by tenants prior to their move to Universal Credit and arrears directly linked to the move to the new benefit system.

Currently, arrears from UC claimants make up 38 per cent of the housing provider’s current arrears - a figure currently standing at more than £2.1million.

UC was first introduced in 2013 and was intended to replace six ‘legacy benefits’ including unemployment benefit, tax credits and housing benefit.

It is expected to be rolled out to around seven million people by 2022/23 and has been criticised for putting poorer claimants at heightened risk of debt, rent arrears and homelessness.

Currently, South Tyneside residents claiming the benefit include new claimants or those who have had a change in circumstances.

Accrding to the report, residents on UC in the Hebburn area owe South Tyneside Homes £125,900.

Hebburn Area Manager, Kate Curry, speaking at the Hebburn Community Area Forum this week, said one of the features of UC was that it was paid to the tenants direct.

She explained, UC has the potential to have a “massive impact on arrears for organisations.”

While housing benefits used to be paid to housing provider at a set time, issues around the timing of UC payments can cause tenants to fall into arrears, the meeting heard.

Ms Curry added: “It’s a real administrative issue and that is why the housing welfare team have been putting measures in place and keeping.” The meeting also heard that South Tyneside Homes was “learning lessons” from other authorities managing UC cases to help minimise impact on tenants going forward.

This includes working in partnership with the Job Centre and Department of Work and Pensions and introducing new software to help target advice and support.

South Tyneside Homes are expected to receive 220 new UC cases per month until 2022 when all cases are expected to to have moved over from housing benefit to UC.

To tackle the demand, South Tyneside Council have also backed a probe into UC in anticipation of the “year on year” impact in the borough.

Chris Binding , Local Democracy Reporting Service