Universal Credit warning: Renters could be made to pay back thousands in housing benefit
The Department for Work and Pensions (DWP) is examining claims made during the pandemic that were approved without going through the standard verification processes. In particular, the DWP is revisiting claims made by private renters on Universal Credit during the lockdowns. It’s thought many Brits could owe thousands.
When the first lockdown came into force in May 2020, the DWP stopped all in-person interviews and full checks for some verification processes were also stopped.
Basic checks such as asking for a copy of a tenancy agreement for new claimants were sidetracked as JobCentres were closed and all new claims were made online or over the phone.
Many renters may be forced to repay thousands if they cannot prove their tenancy to the level required by the DWP.
Many brits who, despite paying rent over the pandemic, may sublet or have what is known as a “rent-to-rent” arrangement may not be able to provide proof of tenancy to the level the DWP requires.
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An increasing number of Britons have what is known as a “rent-to-rent” arrangement where one person pays rent, bills and council tax to one of their housemates instead of directly to the landlord who owns the property.
Many Brits search house share websites for temporary or quick flatshares.
But, some of the properties listed may be what is called an “unlicensed House in Multiple Occupation”.
Landlords need a license if they want to rent a property to five or more people who make up more than one household.
It is illegal to rent a property in this way without such a license.
Many Brits are not aware of this law and so they use house share websites without realising their tenancies could be seen as invalid in the eyes of the DWP when it comes to claiming housing benefits.
The number of private renters has risen dramatically over the pandemic and so this new crackdown on previous claims could affect thousands of clueless Brits.
One Brit who has unwittingly fallen into this legal sinkhole is Tina Newman.
She told The i she has been made to repay £5,372 of the housing element of her Universal Credit payments as she doesn’t have a tenancy agreement.
Ms Newman is a private renter who pays her rent and bills to one of her housemates instead of to the owner of the property.
Ms Newman could prove she paid rent to her housemate through bank statements but, this is not an accepted official form of rental liability according to the DWP.
Her landlord is refusing to provide an official letter to the DWP to prove she is a tenant and Denise Ms Newman lives at the property.
Ms Newman says a tenancy agreement was not asked for when she first made her Universal Credit claim after she lost her job.
Many could be faced with a hefty bill similar to Ms Newman’s as the number of private renters on Universal Credit has risen dramatically throughout the pandemic,
According to the DWP the number of private renters claiming Universal Credit rose from 749,000 to 1,549,000 in the year to February 2021.
This equates to an increase of 800,000, or in other words an increase of more than 100 percent.
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