Universal Credit: Highlands to be among the first hit

We are urging Highland benefit claimants to learn the facts on Universal Credit after the UK Government announced that Inverness will be the first Scottish location to adopt the system this November following a pilot in Manchester in April.

Billed as the biggest change to the welfare system in 60 years, Universal Credit will see six benefit payments (Jobseekers Allowance, Employment and Support Allowance, Income Support, Working Tax Credit, Child Tax Credit and Housing Benefit) rolled into one lump sum which will be paid in arrears directly to the claimant’s bank account each month.

This means that local tenants who receive Housing Benefit will have to pay rent directly to their landlord, instead of the Department for Work and Pensions automatically doing so on their behalf.

Calum Macaulay, our Chief Executive, said: “We are very concerned that people claiming benefits over a large area in the south of the Highlands are effectively being used as guinea pigs for testing out welfare reform changes ahead of the rest of the country.  We are the only area in Scotland and one of only six across the UK to be included in this early roll out programme. Universal Credit is still a very new concept and many tenants are unaware of what it will mean for them.

“For some, Universal Credit could lead to an overall cut in household income, making day-to-day life harder. It could also lead to an increase in rent arrears if people don’t know they have to pay their rent directly, or if financial circumstances mean they need to choose between feeding families, heating homes or paying rent.”

To start with it is likely that only new claimants of working age, single people with no dependants and unemployed people who are considered fit for work will be assessed under the new Universal Credit system.

Mr Macaulay added: “As Universal Credit is rolled out, most tenants who currently choose to have their housing benefit paid directly to their landlord will no longer have this option, and we expect that some of our tenants will struggle to adjust to new ways of managing their money and household budgets.

“Since the introduction of the ‘Bedroom Tax’ in April, Albyn and other housing providers have seen a notable increase in rent arrears.  Around 350 of our tenants are currently affected by the bedroom tax and we anticipate that levels of rent debt will increase by around £100,000 during this financial year. This figure is likely to grow as we are only able to rehouse a handful of people to smaller accommodation each month.

“If this trend continues, and the roll out of Universal Credit leads to a further increase in rent arrears, it will seriously impact upon our ability to deliver future building programmes and upgrades to our existing housing stock.

“We are working with our local social housing partners to identify those who will be affected and raise awareness of the changes being introduced this autumn. If any of our tenants have any concerns or questions we would advise them to speak to our tenancy sustainment team for information and advice.”

For more information about Universal Credit go to https://www.gov.uk/universal-credit