Ask CPAG Online- What problems can arise with a UC Alternative Payment Arrangements?
This section considers some of the problems that can arise with alternative payment arrangements (APAs) and some possible solutions.
Timing of payment of rent to landlords
When an APA includes direct payment of your UC housing element to your landlord, it is paid after you are paid your UC, i.e. after the end of your UC montly assessment period. However, that can very easily result in your landlord not receiving the money to cover your rent when it is due. As a result, some landlords have been regarding people with APAs as being in further rent arrears. (A very similar problem has been occuring for some claimants in Scotland who are having their UC housing element paid direct to their landlords under the 'Scottish Choices' arrangements.)
There is no straightforward solution to this problem. The best advice is to encourage your landlord to understand that you have no control over the timing of the payment, and that under the APA they will be paid your housing element towards your rent even though the timing of that payment is not aligned with the date that your rent is due.
Delays can be caused by a number of factors including DWP maladministration, insufficient staff, and communication breakdowns. There is no legal time limit for the DWP to make a decision and put an APA into effect, but unreasonable delays can be challenged in a number of ways. Delays in putting an APA into effect could leave you without UC (or the housing costs element of UC) when it is due.
What can you do?
It is clearly important to check that your (or your landlord's) request for an APA was received and accepted and whether and when it is being dealt with. Communication problems may need to be resolved (e.g. where it was unclear whether information you gave was a request for an APA, or where you or your landlord has not submitted the required evidence of your rent arrears). As well as 'chasing up' the DWP, you could:
- make an official complaint, and if necessary pursue it to the Independent Case Examiner and / or your MP who can also refer it to the Ombudsman;
- threaten judicial review by sending a letter before action to the DWP and DWP solicitors (you may need to consult a lawyer or obtain specialist advice about this and there are strict time limits for pursuing a judicial review).
Where you are facing possession proceedings or facing eviction, you or your landlord may need to act urgently to secure an APA for 'managed payments'. The DWP has set up an email address for landlords to use for urgent enquires, including where a tenant is facing eviction. It is firstname.lastname@example.org. Your landlord or a Court may agree to suspend possession proceedings pending an APA for 'managed payments'.
If the DWP refuse to make an APA, there is no right of appeal within the UC adjudicaton rules.
What can you do?
- You can ask for a review, which can be undertaken by the same UC Agent who made the decision, or a different Agent. You can do this by ringing the UC Helpline or writing to the office which made the decision. You should submit any additional information or evidence which supports your case.
- Where the original and / or review decision is unreasonable and contrary to the evidence and the DWP's own Guidance, there may be grounds for legal challenge by judicial review. A letter before action may compel the DWP to revisit the decision. You may need to consult a lawyer or obtain specialist advice about this and there are strict time limits for pursuing a judicial review.
- Where the need for an APA relates to disability (e.g. a learning disability or mental health condition which impairs your ability to cope with the normal UC payment arrangements), a refusal could constitute unlawful discrimination under the Equality Act 2010 - in particular a failure to make 'reasonable adjustments' in the light of your disability. In these circumstances, there may be grounds for a discrimination claim in the County Court (a claim must be brought within 6 months of the breach). You should seek advice from an appropriate lawyer if you think you may have a case.
Reviews and terminations
APAs are designed to be a temporary arrangement while you adjust to coping with the normal payment method of single monthly payments directly into your bank account. The DWP Guidance refers to review periods of between 3 and 24 months depending on your circumstances. You should be consulted when your case is reviewed to decide whether you can now manage without an APA. Following the review, your APA may continue or suddenly stop (with or without notification to you).
If you have applied for discretionary housing payments (DHPs), you may be told that these can only be paid if your APA for direct payments to your landlord is stopped.
What can you do?
If you are consulted about a review, make sure you tell the DWP whether and why you still need an APA (e.g. because your circumstances and inability to cope with the normal payment methods have not changed). If your APA is stopped against your wishes, you can ask for a review and challenge the decision in the same way as an initial refusal (see above).
There is nothing in the law which prevents the award of a DHP if you have an APA for 'managed payments' to your landlord, as long as you still need financial assistance to pay your rent. You can dispute any decision to refuse a DHP on these grounds (see How can you dispute a DHP decision?)
Where your income varies (e.g. because the hours you work varies),the amount of your UC will fluctuate, which can make it difficult to budget.
What can you do?
An APA for managed payments to your landlord and / or more frequent than monthly payments may make it easier for you to budget. You should be aware, however, that where your UC falls below the level of your housing costs element, the amount paid to your landlord could vary from month to month making 'managed payments' less helpful because you would need to ascertain and pay the varying amounts of the shortfall each month.
Deductions to clear your rent arrears
Where an APA for 'managed payments' to your landlord is set up because you have rent arrears, the DWP can also deduct a further amount from your monthly UC award of between 10% and 20% of your standard allowance, and pay it to your landlord to clear the arrears. It appears that the DWP automatically apply the maximum deduction of 20% where there are no other 'third party deductions' being made from your UC. This can be as much as £63.50 per month if you are a single claimant aged 25 or over and is much higher than the standard deduction of £3.70 per week from 'legacy benefits'.
What can you do?
If you can come to an arrangement with your landlord to pay off your arrears yourself at a lower rate, you may be able to avoid deductions from your UC (the landlord may agree to not request a 'third party deduction' when applying for a managed payment on form UC47, or you may be able to persuade the DWP to remove an existing deduction).
If a 'third party deduction' for rent arrears is in place and is causing you hardship, you can ask for the amount to be reduced to a minimum of 10% of your standard allowance by writing to the DWP or contacting the UC helpline. You will need to give details of your finances and the hardship caused by the deductions. The DWP has internal guidance on how they should deal with applications.