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Applying for Direct Housing Payments under Universal Credit and Deductions for Arrears


This guide explains how and where a landlord can make a request for direct payments through the Universal Credit system and apply for deductions from the tenant's ongoing Universal Credit payments to recover outstanding rent arrears, but only where the tenant continues to live in the property to which the arrears relate. Please be aware that this system is always subject to change but details are accurate as of April 2018.

Paying the Tenant is normal

As with the other elements that make up a Universal Credit payment, housing costs are normally paid direct to the Claimant/Tenant; not direct to the landlord. There are protections available for the landlord, e.g. where there are rent arrears. In these cases, landlords can request what is called a landlord managed payment, or an alternative payment arrangement, under which the housing costs element can then be paid to the landlord, if the request is approved.


Direct payments to Landlords are kept under review. DWP will fix a review date with a view to the tenant then returning to the former single monthly payment process. Reviews will be set for 3, 6, 9, 12, 15, 18 and 24 month periods but could be longer in some instances. The idea also is that those Claimants who have direct payments of housing costs to their Landlords made will also receive personal budgeting support to build the Claimant's financial capability so that in time they can manage a normal single monthly payment.


When DWP review APAs they will decide whether the Claimant is capable of managing a single monthly payment. They will look at outcomes from the money advice offered and whether or not the Claimant himself/herself is financially capable to manage UC without the need for a direct payment for the rent.

Direct payment to Landlords - alternative payment arrangements

Alternative payment arrangements (i.e. direct payment to the landlord) allow for paying the housing costs element of UC as a landlord managed payment direct to the landlord. They can be considered at any point during the claim. They may be identified at the outset at the Job Centre interview or during a claim. They can also be triggered as a result of information received from the Claimant, or the Claimant's representative, as well as the landlord.

Deductions to pay for outstanding arrears can also be applied for at the same time.

To safeguard the Claimant's home a landlord is able to notify DWP of a build up of rent arrears and ask for the housing costs element to be paid direct to him/her provided a rent arrears trigger has been reached.

A managed payment direct to a landlord can be made when:

Annex A sets out the factors to be considered. There are two tiers. Tier 1 factors apply where it is highly likely/probably that there is a need for an APA. Tier 2 factors are cases where it is less likely/possible need for an APA.

The two most relevant factors for private landlords are Tier 1- severe/multiple debt problems or that the tenant is currently in arrears/there is a threat of eviction/re-possession. It can also applyif the Claimant has been evicted for rent arrears in the last 12 months or where the Claimant is subject to/threatened with eviction and/or repossession.

Tier 2 factors include a history of rent arrears. This applies where the Claimant is not in arrears but may have been within the last 12 months when subject to or threatened with eviction and/or repossession. However, DWP also consider in this case the fact that the Claimant may now be financially capable of managing their own financial affairs effectively.

APA should only be considered for those Claimants who cannot manage the single monthly payment and as a result there is a risk of financial harm to the Claimant and/or their family.

In deciding whether to make APA the process is Claimant Centric i.e. something that is considered and discussed with the Claimant. Applications are considered on an individual basis. DWP look at individual circumstances and characteristics. Factors looked at include:

These factors are looked at against the Tier 1 and Tier 2 criteria.

If an APA is put in place payment of UC housing cost element to the Landlord is the first priority in order to safeguard the Claimant's home. DWP can also see if a more frequent payment than a monthly payment is needed. If this happens where the Tenant pays rent the Landlord will also want to be paid and likewise if there is to be a split payment award between partners.

An e-mail facility is available, allowing Landlords, including private landlords, to make Alternative Payment Arrangement (APAs) applications, including requests for payment redirection, in respect of Universal Credit. APAs are also known as landlord managed payments.

If the Landlord is making the request this can be:

Email applications for direct payment

Private Landlords need to be aware that there are 2 forms available to submit APA applications. The first, UC47 secure, is for landlords using the post; not use by email (unless in a very exceptional case a private landlord does have a secure Government email address) If the landlord is applying by email then you must use the form (UC47 - non secure). This form requires less information. DWP have said "this is to minimise the risk of sensitive claimant information being intercepted". When completing the secure form you will need to indicate which of the Tier 1/Tier 2 criteria are applicable. The non secure email request must not be accompanied by supporting evidence/documents.


Landlords can only access the UC47 form by completing a small questionnaire on the government website that helps you identify the right document.

Supporting Evidence

Evidence must also be provided before a direct payment for the Landlord can be made.

This is as follows:

Where the landlord applies for a managed payment for rent arrears, they will not be required to provide additional supporting information other than that provided on the UC 47 forms, as these forms catch all the relevant information required to make an APA decision.

To progress the request for managed payment, it must be linked to the tenant's Universal Credit claim. In order to do this the application must provide the tenant's national insurance number or, if not known, a tenant's date of birth.

What happens next

Once DWP have received the required information they will make a decision on whether or not a managed payment direct to the landlord is appropriate and inform both the landlord and the tenant.

If the managed payment is refused the notification issued to the landlord will not advise the landlord if their tenant is currently getting UC, nor will it advise them of the reason why the application has been refused.


There is no right of appeal against the decision. However, a decision can be reviewed if further information is provided.

Personal budgeting

APAs will be reviewed to take account of claimant's change in circumstances and characteristics. The aim is to deliver money advice with the personal budgeting support process to build the claimant's financial capability so that, in time, they can manage the UC single monthly payment without direct payment to the landlord.

Changes in circumstances

If the tenant/claimant declares a change in circumstances, e.g. change of address, income or other income, the managed payment to the landlord would automatically be reviewed. Importantly, where the claimant has changed their address the managed payment to the landlord will be stopped and notification issued to the claimant and the landlord concerned.

Vulnerability and direct payment to landlords

The intention is that those who cannot manage their own financial affairs or are unlikely to pay rent should be identified as being vulnerable at the outset and arrangements are then made which can include direct payment to the landlord. It can also be things like budgeting support.

DWP may take the decision in a particular case that direct payment to the landlord is not needed because a claimant can manage their own payments either with the help of an external advice agency who will assist with budgeting.

The claimant, their representative, or the landlord can make this request. The claimant (or their representative) can make the request either during the initial work search interview with their Job Centre Plus Work Coach or by telephoning Universal Credit on 0800 328 9344 (live service claimants)or 0800 328 5644 (full service claimants). If the landlord is making the request then the procedure outlined above should be followed. It is important to identify the relevant criteria, Tier 1/Tier 2.

When can direct payments to landlords be made?

Eligibility for direct payment to landlords is assessed based on a combination of financial and vulnerability risk factors. There is a screening process at the outset. Measures short of direct payment to the landlord may be applied instead. This process will involve a number of stages:

There is no provision for the first payment of benefit to the landlord in all cases although, where this is appropriate, payment can be made direct to the landlord from the outset.

Existing direct payments

Even if a claimant has been in receipt of direct payment of housing benefits/LHA from the local authority to a private landlord this does not mean that direct payment of housing costs will be made to the landlord under Universal Credit. Each claim will be looked at individually.

Housing costs and rent under Universal Credit - Discretionary Housing Payments

Universal Credit claimants can contact their local authority and apply for a discretionary housing payment. This payment gives the claimant/tenant additional financial support to meet any rent shortfall or other housing costs. The decision of an award of discretionary housing payment rests with the local authority concerned.

Notification of changes of circumstances

If the landlord is in receipt of direct payment/managed payment, then it is the landlord's responsibility to notify any changes of circumstances, e.g. the tenant leaving the address. Failure to do so may lead to a repayment claim being made against the landlord.

Deductions from Universal Credit for arrears

As with the existing system Universal Credit will permit deductions to be made from benefit entitlement including for rent arrears. Landlords can apply for "Third Party" rent arrear deductions from tenants' Universal Credit, but only landlords with arrears relating to the property currently lived in by the tenant/claimant can claim these deductions.

Deductions can be made at the rate of 20% of their Standard Allowance, although, in most cases, the deduction is likely to be capped at 10% or 15% because the tenant has other secondary debts, like Gas/Electricity, Council Tax, or Court Fines.

You can expect that the rent arrear will need to amount to at least 1 month's arrears, accrued at the current claimant's address. Payments are likely to stop as soon as the debt is cleared or where the tenant vacates that landlord's property. Private Landlords should welcome the move as "Third Party" deductions are not something they have made much use of in the past.

The landlord completes the application and sends it to the DWP benefits or pension centre that normally deals with the claimant's claim.

To qualify for deduction for arrears of rent the following conditions will have to be met:

  1. The claimant must be receiving Universal Credit including an element of housing cost.
  2. The claimant must be in debt for rent payments (or service charges included in the claimant's rent).
  3. The claimant must still occupy the accommodation to which the debt relates.
  4. The claimant's earnings must be below the relevant minimum earnings disregard.

Where these conditions apply DWP may decide to deduct a monthly amount from the Universal Credit. This can then be paid to the landlord. The circumstances and cases are set out in guidance. Deductions must stop if the claimant's earned income reaches the applicable earnings disregard for three months. Overall for the total of all kinds of deductions there is a 40% maximum of the standard allowance, although in exceptional circumstances, deductions and direct payment to landlords can be made as a last resort to allow someone to remain in their home or to receive fuel and water supplies on an ongoing basis.

How are deductions or alternative payment arrangements prioritised?

Universal Credit is paid as a whole and incorporates a number of different benefits as one singular payment. As such, payments intended for housing are not ring fenced exclusively for the landlord. This means that higher priority deductions can potentially interfere with the full payment of an alternative payment arrangement.

Prior to paying the claimant's Universal Credit, deductions will be made in the following order:

  1. Conditionality sanctions
  2. Third Party Deductions
  3. Managed payments to the landlord

Once deductions have been for the first two in the list, the landlord will be paid out of whatever is left over. This means that it is entirely possible that the landlord will not receive the full amount of rent where there are a number of sanctions or deductions on the claimant.

How do I challenge a failed APA request?

Landlords may want to challenge any Alternative Payment Arrangement (APA) request, which is:

DWP's handling of APAs at times has been seriously flawed, mainly due to a combination of lengthy processing delays, documents disappearing, and basic errors made by staff. DWP staff were also failing to recognise that they could suspend payment of the "housing costs" so continued to make payments to tenants, some of whom had already misused payments, accruing substantial rent arrears in the process.

Landlords may use the DWP complaints procedure. Also, unlike under LHA, there is no right of appeal to an independent tribunal.

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