To ask the Secretary of State for Work and Pensions, pursuant to the Answer of 3 December 2018 to Question 196906 on Universal Credit: Housing, whether she has made an assessment of the potential effect on levels of poverty among universal credit claimants of not amending universal credit regulations to allow the housing cost element for renters to be calculated for a 53-week year in 2019-20; and if she will make a statement.
31 January 2019
The Department has looked into this issue again and has concluded that neither tenants or landlords suffer financial disadvantage in 53 weekly payment years.
Universal Credit simplifies the welfare system for working age claimants and is paid on a monthly cycle to reflect the fact that the vast majority of people receive their wages monthly. Many social landlords still expect their tenants to pay rent on a weekly basis, a practice based upon a time when both wages and benefits were paid weekly.
This perceived issue is caused by the impossibility of accurately aligning weekly and monthly payment cycles at all points in time. By selecting a random period, it is possible to show a theoretical shortfall which does not exist in practice. Having 53 rent payment days does not mean having a higher rental liability over the course of the year; some of the days covered by the final payment will relate to the next year because a year never contains 53 full weeks.
The effect of this is that, over the course of the next housing association rental year, a tenant’s UC payments will accurately reflect their liability, irrespective of the 53 payment weeks.