Direct Payment Exemptions May Be Increased

  • Department of Work and Pensions are considering more exemptions for direct payments to be announced for when universal credit is introduced.

    Graham Mowat, of the universal credit directorate at the Department for Work and Pensions (DWP), said ministers have considered that there will be more people who are likely to struggle with direct monthly payments.

    The DWP is trying to find alternative plans for benefit claimants who are unlikely to be able to cope with the suggested direct payments when universal credit is introduced.

    Direct payments are one of the concepts of universal credit, which will be gradually introduced in October and will consist of one monthly payments of welfare benefits, instead of multiple benefits, which will be paid directly to one family member.

    Charities and campaigners have expressed great concern about whether this concept is realistically appropriate for many vulnerable people, for example people who have experienced domestic abuse, addicts, and those who will struggle to manage their finances.

    There are a few exemptions that have already been introduced since universal credit was announced, and issues such as domestic violence have been dealt with, and ministers have said that when issues arise there will be further assessments, but most people are concerned that there should be further exemptions set up before universal credit is introduced based on the knowledge already available.

    The DWP seem to have noticed this now and are looking in to arranging further exemptions, for those who need payments to be directed to the landlord, split between partners, or paid on a more regular basis.

    Mr Mowat said:

    In terms of alternate payment arrangements, we always said we would fund these, the big shift in the past year has been moving on ministerial, special advisers', and secretary of state's thinking about what the acceptable level of volumes might be, particularly at the outset.

    [There is] also a recognition now from ministers that there might be some people who are on alternate payment arrangements into the longer term.The big change has been the volumes and we are working at the minute to try and get those volumes into the public domain.

    Mr Mowat also said he acknowledged the communications from the DWP on universal credit have not been ‘up to the mark' and there will be more in the future.

    Last week, the London Assembly called on Boris Johnson to urgently assess the impact of direct payments. They believe that direct payments will exacerbate the already growing housing crisis in London with an increase in arrears and evictions.

    Pilot schemes of the payments have already shown large increases in rent arrears, with one area out of the six pilot areas predicting a £14m loss if the new system is implemented for all its tenants.

    Labour's Fiona Twycross, who proposed the motion, said:

    These proposals are an object lesson in poorly designed reform and promise to create the perfect storm of unintended consequences.

    All the evidence suggests that when housing benefit is paid directly to tenants, more people get into arrears and that means housing association losing out on the cash they need to build more affordable homes.

     

     


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