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Universal Credit - Guide for Landlords

If you currently, or plan to, have tenants that receive Universal Credit in your rented property, then find out what this means for you as a landlord and how the rent can be paid.

What is Universal Credit?

Universal Credit is a replacement of six benefits into one lump sum payment to claimants. Those eligible must be of working age (aged 18 or over and under State Pension age); on a low income or out of work; have less than £16,000 in savings and live in the UK.

Can Universal Credit be used to pay rent?

Yes. Those who receive Universal Credit will be expected to pay rent to their landlord themselves. Tenants are required to show evidence of their rent, and any service charges, when claiming their Universal Credit and they will be paid whichever is lower out of the actual rent cost or the Local Housing Allowance rate for the area.

See how much the Local Housing Allowance rates in your area are.

If requested, you should provide any potential tenant with written confirmation of the amount of rent plus any service charges, either through a letter or a tenancy agreement that includes your full name and address.

Service charges relate to the upkeep of communal features of a property (such as a shared garden or hallway) and will likely only be applicable in a block of flats or similar property. Service charges that are eligible for payment under Universal Credit, along with the legal definition of what is considered an eligible service charge, can be found on the GOV site.

NOTE: It can take around five weeks for a claimant’s first Universal Credit payment to be paid. Be patient if a tenant has just begun the process of claiming Universal Credit.

Can Universal Credit be paid directly to me?

Only in certain circumstances. In Scotland, Universal Credit claimants can choose to have their housing costs paid straight to their landlord. For the rest of the UK, this can only be arranged if the claimant is particularly vulnerable, struggles to budget or is currently in rent arrears.

In this case, the claimant can ask for an Alternative Payment Arrangement (APA) to be set up, allowing the housing cost from their Universal Credit to be paid straight to their landlord; this is known as a ‘managed payment’.

If you, the landlord, believe the tenant is having trouble paying their rent, then you can request for a managed payment to be set up yourself.

Find out how to set up a managed payment for your tenant’s rent here.

What if a tenant’s Universal Credit doesn’t cover the entire cost of rent?

In this case, a tenant may be eligible for a ‘discretionary housing payment’ to cover any extra housing costs not covered by Universal Credit.

You can find out more about discretionary housing payments here.

Where can I find out more?

To find out more about being a landlord to Universal Credit tenants, you can read the Government’s advice here.

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