Scottish Flexibilities for Universal Credit

Universal Credit payments in Scotland are to become more frequent and adaptable, as new social security powers are set to be used by the Scottish Government.

Tenants will have the choice of having the housing element of Universal Credit payments made directly to landlords and, in a new move, Social Security Minister Jeane Freeman has announced this new flexibility will be available for tenants in the private rented sector as well as those in social housing.

The use of new flexibilities around Universal Credit payments – the benefit remains reserved – marks the first use of new social security powers under the Scotland Act 2016, with a consultation to be launched later this month on the necessary regulations.

New applicants who live in Full Service areas – local authority areas where a digital claiming system has been established by the UK Government – will be given the option of twice-monthly payments instead of the DWP’s current monthly payment system.

Social Security Minister Jeane Freeman said:

“As part of the social security consultation exercise last summer, we heard direct from people that paying the housing element of Universal Credit direct to landlords and receiving more frequent payments would be two important improvements to the DWP approach. These are issues that people have repeatedly raised with us, highlighting the problems the current system can cause for budgeting .

“I am delighted therefore that I am able to address these concerns and go further, by extending the direct payment option to tenants with private landlords, and deliver these flexibilities for people in Scotland. 

“People claiming Universal Credit want to have a choice about how the housing element part of the payment is paid – we have listened to that wish and are now taking action to make sure it happens as quickly as possible.” 

Following the devolution of new powers by the Scotland Act 2016, the Scottish Government is committed to ensuring the relevant regulations are used to give Scottish applicants more choice and control over the housing element of Universal Credit payments – with the technical delivery to be managed by the UK Government. 

Ms Freeman continued:

“I am pleased this marks the first use of our new social security powers.  We want to ensure people are treated with dignity and respect when in receipt of all of our new Scottish Social Security payments and this is an important first step we can take.

“Universal Credit remains reserved to the UK Government but work with DWP to deliver the powers over the flexibilities is progressing and our priority is to ensure that, when these are devolved to us, we are ready and able to implement them in a way that best meets the needs of the people of Scotland.

“That means we need also to progress the legal basis needed for these first improvements. And the first important step is to gather people’s views on the draft regulations so we will launch our consultation on the regulations in the next few weeks.”

John Blackwood, Chief Executive of Scottish Association of Landlords, said:

“We welcome the extension of choice of direct payments to landlords for tenants in the private sector of the housing element of Universal Credit. 

“This should help protect tenancies and minimise rent arrears which will benefit both the tenant and the landlord.  It is only fair that private sector tenants have the same option to choose direct payments as tenants in the social sector.”

Background

Universal Credit (UC) is a new single payment for working age people introduced by the UK Government.  UC aims to improve work incentives, simplify the benefit system and reduce fraud and error.  UC remains reserved to the UK Government; however the Scottish Government has some administrative powers to change payment arrangements for UC.

The main differences between UC and other current welfare benefits are: UC is available to people who are in work and on a low income, as well as to those who are out of work; most people will apply online and manage their claim through an online account; claimants will usually receive just one monthly payment per household, paid into a bank account; and support with housing costs (rent) will go directly to the claimant in most cases as part of their monthly payment.

UC Full Service is being rolled out across Scotland for new claims from working age people. The new flexibilities will apply to those new claims as UC reaches the local area and to those currently in receipt of UC through the Live Service who live in Full Service areas as their claims are transferred over to the new Full Service system.

The flexibilities are being implemented by DWP and UC remains a reserved benefit.

The following link provides more information on Universal Credit:

https://www.gov.uk/guidance/universal-credit-toolkit-for-partner-organisations

The Scottish Flexibilities

The flexibilities are being progressed to make it easier for people to manage their UC payments.:

- Having the option of being paid UC twice a month rather than monthly; and

- Having the option of any UC housing element being paid directly to landlords.

Future Opportunities

Analysis of the responses to the social security consultation exercise held during 2016 and discussions with individuals and relevant organisations will shape what other UC flexibilities the Scottish Government may decide to progress at a later date.