Today we’re publishing our response to the Department of Work and Pensions’ (DWP) consultation on how rent arrears are deducted from Universal Credit. Currently, up to 5% of someone’s standard allowance can be taken to pay rent that they owe, but the DWP is considering raising this to 40%.
It is important that rent arrears are repaid so people can get out of debt and reduce the threat of eviction, but we’re concerned about the impact of taking 40% of someone’s Universal Credit on their ability to manage day to day. The proposals would also mean the amount of Universal Credit people get each month varies month to month, making money management much harder.
Instead, we’ve suggested repayments should be a maximum of 20% of someone’s standard allowance, or 10% of the amount that they owe in rent arrears. This would mean landlords would be repaid quicker than under the current system, but repayments would be spread out, and people receiving Universal Credit would keep more of their money than the DWP is proposing.
To read our full response, click here