Housing associations say the problem will hit tenants who pay rent weekly in 2019/20 – and demanded action from the DWP to close the “bizarre” loophole
Hundreds of thousands of Universal Credit claimants are set to lose out on a week’s rent next year thanks to a major glitch, housing associations have warned.
Campaigners demanded action from the Department for Work and Pensions (DWP) to close the loophole after it was branded “bizarre” and “unfair”.
The problem hits council and social housing tenants who pay rent once a week.
Many will make 53 rent payments in 2019/20 because the financial year has 53 Mondays. Yet they are due the same amount of Universal Credit as if they paid 52 weeks, because the six-in-one benefit is calculated differently.
DWP officials insisted today there are “no plans” to change the system because it would be too “complicated”.
But Catherine Ryder, Head of Policy at the National Housing Federation, told the Mirror: “It’s a really serious situation. This whole mess is entirely avoidable.
“Ministers have to act now to sort it out.”
Labour MP Ruth George, who has raised the issue face-to-face with DWP chief Amber Rudd, added: “Having 53 weeks of rent in a year is an anomaly of the system, it’s not anyone’s fault.
“So to refuse to compensate tenants on Universal Credit is a bizarre decision that will leave claimants even more out of pocket.”
The problem, raised by the NHF and first reported by Inside Housing, is expected to affect Universal Credit claimants who pay weekly rent once every six years.
The NHF says that because UC is paid monthly, it is calculated using a formula that effectively takes 52 of a claimant’s weekly rent payments and divides the total by 12.
But there are 52 weeks plus one day in each year. That means every six years or so, a tenant has to make 53 rent payments, not 52.
Housing associations say the issue will come to a head in 2019/20 because ‘rent day’ is usually Monday, and the year has 53 Mondays.
Rochdale Boroughwide Housing expects 2,951 tenants to lose out by an average of £76 each, while Bolton at Home expects 4,000 to lose out by £75 each.
The NHF, which represents housing associations, says the majority of claimants have their entire rent paid by UC, while others receive a contribution towards it.
That means the majority of those affected are set to lose out on a week’s worth of rent, according to the NHF.
Ms Ryder said: “To solve this, the Government only needs to make a small change – but it’s one that will help hundreds of thousands of people across the country.
“Otherwise, people will lose out and possibly end up falling behind with their rent.
Last month Work and Pensions Secretary Amber Rudd told MPs the issue was one of “quite a few” bugs in the system and said: “We will address it and I will come back to you on it.”
But today DWP officials claimed change “would be complicated and lead to confusion” and said the average cost over six years was 35p a week.
A spokesman said: “A key principle of Universal Credit is that it simplifies the benefit system and the Department has no plans to amend the regulations for assessing housing costs.
“Some social housing providers have moved to charging new tenants on a monthly basis to overcome any challenges on the rare occasion a 53 week charging year may occur.”