Curo lobbies government on its tenants’ behalf over Universal Credit rent shortfall

May 31, 2019

Bath-based housing association and housebuilder Curo has added its voice to calls for the government to amend Universal Credit (UC) calculations that could leave some of its tenants without enough money to pay their rent this year.

The shortfall is due to the calculation used by government which pays UC monthly while housing association rents are charged weekly. This year weekly rents are payable 53 times, however UC payments only recognise 52 weeks. 

Curo director of tenancy services Sarah Seeger said: “We are very concerned about the impact on our tenants because it’s clear that the 12 monthly Universal Credit payments will not cover all the weekly rent payments that fall this year.

“We responded strongly to the Work and Pensions Select Committee’s consultation on this issue, detailing the impact it could have on landlords and customers. We’ll continue to campaign on behalf of our residents on this important issue.

“It is unfortunate that it has taken a Work and Pensions Select Committee investigation, evidence from housing associations and local authorities and many months for the government to recognise that this is a real problem, not simply one of perception as it had initially stated.

“We welcome the government’s acknowledgment that this is a genuine issue, however it has yet to specify what it will be doing about this. We look forward to hearing the details.”

As the largest housing association in Bath – one of the first areas to pilot UC – Curo has consistently pressed for improvements to the system. Curo’s activity has included rigorous research, advising the Department for Work and Pensions on service improvement, lobbying about the impact of UC regulations and presenting evidence to the Work and Pensions Select Committee in the House of Commons.

Curo has a dedicated team assisting its tenants struggling with their benefits or finances. 

Curo says the problem with the government’s UC calculation is that there are 52 weeks and one day in a ‘common’ year, and 52 weeks and two days in a leap year, meaning that claimants are underpaid by one or two days each year accordingly.

Because rents are debited on a Monday, this underpayment does not manifest itself until a year where there are 53 Mondays, which happens every five or six years. 2019 is one of those years. The underpayments then catch up with the claimant who will find themselves a week short.

For a £100 per week rent this will lead to a shortfall of £8.33 a month in the 53 Monday year.

While this shortfall may be tolerable to claimants with some earned income, but claimants managing with just the personal allowance of £57.90 or £73.10 a week will find this difficult.

Curo says that if the claimant is already getting other deductions for an old overpayment of benefit or a UC advance, then the situation becomes very serious and could render the tenancy unsustainable, with the tenant not having the resources to eat, heat and pay their council tax contribution.

For example, claimants may have up to 40% of their personal allowance deducted, leaving them with £34.74 or £43.86 a week to live on, making paying an additional £8.33 per month toward rent in this situation extremely difficult. 

Curo looks after more than 25,000 residents in 13,000-plus homes across the West of England. It also builds hundreds of homes a year.

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