Direct Payments – the tenant moves from captive customer to real customer – SPeye Joe

housingbenefit

It seems the government has actually imposed a ‘welfare reform’ that could give benefit claimants an advantage (for a change)!

Joe Halewood, over on the SPeye Joe blog, reckons the move to Direct Payments for social housing tenants will give them far more power – if they are willing to grasp it.

He writes: “3.4 million or so social housing tenants have their rent paid through Housing Benefit. This goes directly to the social landlord with the HB money never passing through the tenants hands.  Landlords like this arrangement and have become accustomed to it.  Tenants like this too as they have never had to worry about paying rent if on benefit.

“To put that into context the coalition admits 1.4 million of social housing HB claimants are not affected by any welfare reform policy by being pensioners and so this DP change will affect the other 2 million social housing tenants of working-age who claim HB.  Eventually that is 2 million rent accounts each week that will be affected and 2 million rent accounts with rent payments no longer guaranteed.   Social housing has just over 4 million tenant households so DP sees a change from roughly two in every three rents being guaranteed by Housing Benefit to just 1.4 million being guaranteed out of 4 million or about one in three.

“The coalition says in its spin on DP that it wants to make tenants more responsible by paying them directly so that they can pay the landlord. This is an issue of control between tenant and social landlord with the current system seeing landlords in control of the payment of rent: Yet that changes with DP which puts the responsibility and the control of rent payment with the social tenant – and that is a monumental change as the social tenant finally becomes the customer is what DP means.

“Social landlords’ service levels vary significantly and tenants currently have little clout in forcing their landlord to undertake repairs or the like.  Yet that changes dramatically with DP as the tenant becomes in control of the payment of rent.  If and when the tenant has any form of beef with the landlord he can potentially, and will in practice, withhold rent.  It makes no difference that social tenants withholding rent while awaiting repair has a highly dubious legal basis as tenants will withhold rent for this reason in far greater numbers.”

There are problems with this – the social landlord can try legal action if there is a belief that the tenant’s complaint is unfounded – but if large numbers of tenants all acted at the same time, they would be swamped.

It is an interesting spin on the usual story fed to us by local authorities (who currently pay Housing Benefit). They say DP means tenants who are unused to paying their own rent will find it hard to keep up payments because they will be tempted to use the money on other necessities (for which they don’t have enough).

The suggestion that they will use the money as leverage to force landlords into complying with their legal responsibilities is far more empowering – and no doubt exactly what the oppressors in the Conservative-Liberal Democrat Coalition don’t want.

Read the SPeye Joe blog article here.

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7 thoughts on “Direct Payments – the tenant moves from captive customer to real customer – SPeye Joe

  1. Editor

    If I recall with HB you already had the option to have the payment made directly to yourself (certainly South Cambs in 2010 did). So why is this billed as an innovation?

  2. Joan Edington

    I usually agree with everything you say Mike but in this case I must say that in many cases I have to side with the landlord. You say that this is “the usual story fed to us by local authorities” as if they are all liars. I worked for a housing association for several years and their arrears and debt advice departments were never short of work. They tried to help tenants with their problems, and that was before the recent welfare “reforms” that are bleeding the poorest tenants dry. Direct payments do at least keep a roof over peoples’ heads. Luckily, I am not in this position but if I was, and was given money and had a choice of paying rent or feeding, clothing and heating my family, I know where my priorities would lie.

    1. Mike Sivier Post author

      I’m not saying the Local Authorities are all liars – I believed what they were saying and published it on this blog, and I still believe that it is accurate in a large number of cases. Joe’s point is a good one, though. He’s saying tenants who have been having trouble getting HAs and LAs to provide repairs, in accordance with agreements they are duty-bound to honour, now have a new string to their bow.
      You say direct payments keep a roof over people’s heads, but the LAs themselves were saying they were likely to produce the opposite effect, for the reason I mentioned in the article – and, unless you’re saying you’d pay the rent before feeding your family, you would make the same choice.

  3. Kevin James

    Its been very difficult recently for me to try and insist the HB goes direct to landlord. This is best as I have severe mental impairment and can pay a bill 5 times or miss another bill completely. also unless there are reasons,ie disrepair there is no reason, but with the last landlord in regard to asking HB to withhold HB due to disrepair and my paying for it, HB stood by my landlord and nearly got a section 8.

    The knowledge and practise needs to be known.

  4. Leoni Al-ajeel

    My landlord told benefits i was in arrears, which i am, so they started to pay the landlord not me, without asking me first. See landlords can just call them and complain and they pay it to them. The problem is these landlords are charging ridicules rents for places that are only worth half the rent. I live in a 3 bed house back to back terrace, but its a 1 bed really.
    The cellar has been converted into a room that i use for a bedroom. The attic has been converted into a bedroom. But they are not allowed to rent the attic out as a bedroom with no fire escape, but they do all the time. And people are desperate to get a house to live in, so they dare not complain.
    Also if you told benefits any of this, it would be the tenant that gets into trouble not the landlord, as it is the tenant that claims the rent.
    There should be a fair rents officer to oversee these houses and what they are worth etc. We have greedy landlords buying houses and making a fortune off the backs of the tax payer, renting to people on benefits, not saying people should not get benefits, but these landlords are charging far too much for what they are worth and this is not right, making a small fortune off the backs of the poor and needy.

    1. Mike Sivier Post author

      Here in Wales we do have a Fair Rent Officer, and I’m dealing with that service at the moment. The problem is, they look at rents in comparison with similar properties nearby, in order to work out what the average rent is locally, and the problem with that is that it does nothing to stop landlords from charging too much.

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