To ask the Secretary of State for Work and Pensions, what estimate she has made of the number of tenants that will experience a financial shortfall as a result of 2019-20 being a 53-week rent year and universal Credit being a 52 week rent year.
11 April 2019
Neither tenants or landlords lose a week’s rent in a 53 weekly rent payment year as has been alleged; no year contains 53 weeks. The problem is alignment between weekly and monthly cycles. Each month the UC housing element is a constant figure but claimants with weekly tenancy agreements will be required to make either four or five rent payments within this period. If the claimant always pays their rent on time, in five payment months they are effectively making payment for part of the following month. That month will always be a four rent payment month, so the combination of the advance payment and the ‘overpayment’ of housing support during that month will get the claimant back on track
Where a landlord charges rent weekly on a Monday, because of the way the calendar falls every 5 or 6 years, they will seek 53 rent payments in a year, with the 53rd payment in part covering the tenancy for the first few days of the following year. 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.
There is a separate issue with respect to the way the calculation in the Universal Credit regulations converts a weekly liability into a monthly allowance. The conversion is achieved by multiplying the weekly rent by 52 and then dividing by 12. This effectively means one day’s rent a year (two days in a leap years) are not covered by UC. We are currently considering whether this formulation around weekly rents, and potentially other weekly amounts in the UC calculation, should be amended.