Universal Credit - rollout in Northern Ireland
Universal Credit was introduced in Northern Ireland from September 2017 to December 2018.
As Universal Credit has now rolled out across Northern Ireland, people can make a claim to Universal Credit instead of having to submit multiple claims for the six benefits that it replaced.
Universal Credit claimants will have an online Universal Credit account to manage their claim. They will use their account to report changes, send messages to their work coach and find support.
People already receiving a benefit being replaced by Universal Credit
If a claimant’s circumstances change after Universal Credit has been introduced in their area, they may move to Universal Credit at that time and their existing benefits will stop.
If a claimant’s circumstances do not change, they will move to Universal Credit between 2020 and 2023. The Department for Communities will contact a claimant when it is time to move to Universal Credit.
Universal Credit payments
In Northern Ireland, Universal Credit will be paid twice monthly by default. Claimants will be able to opt out and request a monthly payment if they wish.
Couples living in the same household will get a joint payment twice a month, which can be paid into a joint account or a single account in either person’s name.
Universal Credit payments are made up of different amounts depending on the claimant’s individual circumstances.
The Universal Credit amount for housing costs payment helps tenants with their eligible rent and service charge costs. Regulations state that claimants must satisfy three conditions – payment, liability and occupation – to qualify for help with their housing costs.
In Northern Ireland, the housing element of Universal Credit will be paid directly to landlords as the default option for rented properties. Claimants will be able to opt out and have the housing element paid to them if they meet certain criteria.
Claimants will not be able to opt out of direct payment if they:
- are currently in rent arrears or with a history of rent arrears still being recovered;
- have a current benefit debt;
- Where the Universal Credit payment is split between two parties.
- have a current Social Fund Debt
Following a switch back to the default arrangement, a household cannot request to opt out again until six months after any arrears they may have are paid back in full.
If a tenant has opted out of direct payment but they are having difficulty paying their rent, the landlord can apply for a direct payment of rent, or rent arrears deduction.
To apply for a direct payment of rent you must complete a UC 47 form – Landlord request for a direct (managed) payment.
To apply for a rent arrears deduction you must complete a rent arrears form which can be found in the Universal Credit Third Party Payments and Creditor Supplier Handbook.
Overpayments of Universal Credit housing costs
If Universal Credit housing costs are paid direct to a landlord, and the payment made is in excess of what is due, then any overpayment may be recoverable from the landlord. The Department for Communities will notify landlords if an overpayment has been made, and recovery action may be taken by the Department’s Debt Management team.
Social Sector tenants
For social sector tenants, their Universal Credit amount for housing costs will be their actual housing costs. This cannot include service charges that are not covered by Universal Credit or charges for utilities, such as water or electricity.
On 20 February 2017, the Social Sector Size Criteria (SSSC) was introduced in Northern Ireland. Housing Executive and Housing Association tenants whose rental accommodation is larger than they need may have a reduction in the amount of Universal Credit they receive for Housing Costs.
If a social sector tenant claimant has any under occupied bedrooms, their amount for housing costs will be reduced by:
- 14% for one spare bedroom
- 25% for two or more spare bedrooms
A supplementary payment (mitigation) will be paid to all eligible individuals that are impacted by the introduction of SSSC, and will operate until 31 March 2020 to ensure that no household is negatively impacted.
Mitigation payments will normally be made to landlords unless the claimant has opted out of the default arrangement, and manages their own payments to their landlord.
Notifying social sector landlords that tenants are claiming Universal Credit
Housing costs for social sector tenants will be verified by the Department for Communities.
If you’re a social landlord and have a tenant receiving Universal Credit, as part of the housing costs verification process, a form will be sent to you asking for housing cost details. This is also the notification that a claim has been made.
This is in line with the Social Security (Information Sharing in Relation to Welfare Services etc.) Regulations (Northern Ireland) 2016 that will enable the sharing of limited relevant information with social landlords.
The supply of information and its appropriate use is governed by requirements of the Data Protection Act (2018), The General Data Protection Regulation (GDPR) and all applicable law governing the processing of personal data and privacy. Social landlords will have an obligation only to use the information supplied by Universal Credit for its specific intended purposes.
If the amount of housing costs declared by the claimant does not match the information provided by the landlord, a social rented sector tenant will receive an automated request via their online account asking if they agree the with the details their landlord has provided. If the tenant does not provide this information, housing costs cannot be paid.
Payment of Universal Credit housing costs to social sector landlords
For social landlords who have a tenant getting Universal Credit, the third party deductions (TPD) scheme will be used to pay the landlord.
Payments from the TPD scheme are paid 4 weeks in arrears every 28 days. The 28 day TPD payment cycle equates to 13 payments in a calendar year.
Universal Credit payments are paid calendar monthly and equate to 12 assessment periods each year. This means:
- The Department for Communities will assess what deductions can be made from Universal Credit payments 12 times each year, at the end of each assessment period
- the payments will be made following a Universal Credit payment
- when a TPD payment cycle ends before the Department assess what deductions can be made from a Universal Credit payment, then any TPD payment will be paid in the next TPD payment cycle
- TPD payments will be made in 12 of the 13 TPD payment cycles
The first TPD payment from the third party payments system is normally received within 6 to 8 weeks from the date deductions commence, for example, from the end of the assessment period in which TPD payments commenced.
The TPD is paid on the same day that landlords normally receive any third party rent arrears deductions and will be paid into the bank account nominated by the landlord.
If you have multiple properties with TPD, then you will receive a single aggregated payment for all your tenants on a 28 day cycle and a schedule will be sent to you with a breakdown of all payments.
The Department will use the landlord’s creditor reference number to pay both rent arrears and the TPD to the landlord.
Payments will be shown as individual transactions, and will include an identifier to show whether the payment relates to rent arrears or a TPD payment. A remittance note will be sent to the landlord which shows how the payments have been broken down.
When a rent or rent arrears deduction is paid through third party deductions, their claimant/tenant reference number will be annotated at the end with either:
- RA for rent arrears payments
- MP for managed payment
The claimant or tenant reference number shown on the third party payment schedule are 18 characters.
To help with identification of the 2 types of payments, the tenant reference number is 16 characters long, allowing for the RA or MP suffix.
If you have any queries relating to your third party payment schedule you can contact the third party payments team at:
Freepost UNIVERSAL CREDIT NORTHERN IRELAND
Telephone: 0800 012 1331
Textphone: 0800 012 1441
Private Sector tenants
For private sector tenants, their Universal Credit amount for housing costs will be whichever is lower, their actual costs or the Local Housing Allowance rate.
The claimant will be asked to provide the appropriate evidence to support their Universal Credit claim. This will include evidence of occupancy, payment of rent and current rent liability.
If a tenant doesn’t have a copy of their tenancy agreement, Universal Credit may accept a letter from the landlord confirming the current rent and service charges.
Housing costs will be paid monthly in line with the date the claimant receives their first Universal Credit payment.
Notifying private landlords that tenants are claiming Universal Credit
The Department for Communities does not inform private landlords that their tenant has made a claim to Universal Credit. However, Department for Communities will contact private landlords to capture bank details to enable payments to be made.
Payment of Universal Credit housing costs to private landlords
A Bank Automated Clearing System (BACS) payment will be paid into the bank account nominated by the landlord at the end of the claimant’s Universal Credit assessment period, on a monthly basis.
The tenant’s reference number and National Insurance number will be used as the Bacs identifier and will appear on the transaction with the National Insurance number and 10 characters of the tenant’s reference number, in the following format: AB12345670123456789
If a tenant reference of more than 10 characters is used, then the transaction and payment schedule will only include the first 10 characters of the reference.
Where a landlord owns multiple properties, it is recommended that they ensure they provide a tenant reference number. In order to comply with the Data Protection Act (2018), The General Data Protection Regulation (GDPR) and all applicable law governing the processing of personal data and privacy legislation it is not possible to include more than one piece of information per person in the Bacs identifier.
Helping tenants prepare for Universal Credit
Landlords can help tenants to get ready for Universal Credit by encouraging them to:
- go online
- open a bank account to receive payments
- read the Universal Credit and You guide
Universal Credit is designed to be claimed online, if tenants don’t have access to the internet or are not confident using a computer, the local office can tell them about local services that can help.
Universal Credit will usually be paid twice a month in arrears into a single account, so setting up a direct debit or standing order may help them to do this. Tenants can also use the Universal Credit Personal Planner which checks what changes they may need to make to get ready for Universal Credit.
All claimants receive the Universal Credit and You guide when they make a Universal Credit claim to help support them through the changes. You can use this as a basis for conversations with tenants.
First Universal Credit payment
Universal Credit is assessed monthly and paid twice a month in arrears. The first payment will usually be received 5 weeks after they submit their claim. Housing costs are paid monthly in arrears.
Many new claimants of Universal Credit will be coming from work and will be able to support themselves until they receive their first Universal Credit payment, using their final payment of earnings.
However, where needed, a claimant can ask for a Universal Credit new claim advance if they’re in financial need and can’t manage until their first payment of Universal Credit.
From 11 April 2018, where a claimant has received Housing Benefit just before they claim Universal Credit, they will receive an extra two weeks Housing Benefit, known as a ‘transitional payment’ when they make a claim for Universal Credit.
This Transitional payment is paid to the payee who was in receipt of the Housing Benefit payment, normally the landlord. Where a claimant’s rent account is in arrears, this amount may be offset against arrears. If a claimant’s rent account is in credit, they may request this amount from their landlord.
Any queries regarding the extra two weeks Housing Benefit should be raised with the Northern Ireland Housing Executive by calling Housing Benefit enquiries on 03448 920 902 (8.30am to 5.00pm).
Annual rent changes
Claimants are obliged to tell Universal Credit of any changes that might affect their Universal Credit payment, including annual rent changes and changes to eligible service charges.
Universal Credit will be calculated monthly and paid to the claimant twice monthly.
If rent is paid weekly, the monthly rate will be worked out by multiplying the weekly rent by 52, then dividing by 12.
- 4 weekly payments are multiplied by 13 and divided by 12
- 3 monthly payments are multiplied by 4 and divided by 12
- annual payments are divided by 12
Universal Credit will always be calculated based on a 52 week year, unless rent is charged over fewer than 52 weeks.
If rent is charged over fewer than 52 weeks, the monthly payment will be worked out based on the number of weeks rent is charged. For example, if rent is payable 48 weeks of the year, Universal Credit will be calculated as weekly rent multiplied by 48 and divided by 12.
Tenants should be made aware of any rent free weeks they may be entitled to so that they can notify DfC, this will help to avoid confusion and ensure payments are accurate.
Universal Credit payments for 2 homes
Support through Universal Credit can be paid on 2 homes if:
- liability for 2 homes has arisen because of fear of violence in the normal home – in this case, both liabilities can be paid for up to 12 months as long as there is an intention to return to the original property
- a disabled person can’t move into a new home because it needs adaptations – in this case the claimant must show that the delay is reasonable and if so, both liabilities can be paid for up to 1 month
Multiple homes can be treated as a single home, for benefit purposes, where a family has been housed in 2 homes because of the size of the family. This is not time-bound.
The Universal Credit amount for housing costs can also be paid where someone is not able to occupy their home because of essential repairs, but will only cover either the housing costs of the other accommodation or the accommodation which they normally occupy as their home (not both).
If someone cannot move into accommodation immediately because they are in hospital or a care home then the Universal Credit amount for housing costs can be paid on the new accommodation for up to 1 month.
Recovering rent arrears from a Universal Credit claim
Arrears of rent and service charges for the property the tenant is currently living in are included in the list of deductions that can be made from a Universal Credit payment.
If your tenant has accrued rent arrears to the value of 2 months rent or more, you can request a rent arrears deduction.
The maximum rate at which deductions for rent arrears can be made is 5% of the Universal Credit standard amount.
The rate used will depend on the claimant’s circumstances. Only the claimant can request a change to the percentage rate, by contacting Universal Credit.
How DfC will pay rent arrears deductions to the landlord
If approved, rent arrears deductions will be paid under the third party deduction scheme.
Once payments are set up on the third party payments system, you will normally receive payment every 28 days and these will be 28 days in arrears.
The payment will appear as a single transaction on your bank statement along with a reference number (settlement number). You will then receive a third party deductions schedule with a breakdown of all the individual transactions which make up that payment and their associated references.
The first payment is normally received within 6 weeks from the date deductions commence.
For private landlords, a Bank Automated Clearing System (BACS) payment will be paid in to the bank account nominated by the landlord.
Further information can be found in the Third Party Payments Creditor/Supplier Handbook.
Budgeting support available
Claimants to Universal Credit will normally have to wait five weeks for their first Universal Credit payment. Those in financial need who can’t manage until they receive their payment of Universal Credit can request a Universal Credit advance. Claimants needing help with monthly budgeting will be identified through conversations with their Universal Credit work coach or by others providing support.
If an advance does not fully meet the financial need, the claimant can be considered for a Discretionary Support loan, or Universal Credit Contingency Fund payment if they are still experiencing financial difficulty after getting a Universal Credit advance payment.
A benefit calculator is available on NI Direct to give an estimate of Universal Credit entitlement. This will allow the claimant to budget their twice monthly payment in advance of receiving it.
Discretionary Housing Payments
A Discretionary Housing Payment is money towards housing costs only.
If claimants are having difficulty paying housing costs they may be able to get a Discretionary Housing Payment by applying to the Northern Ireland Housing Executive (NIHE).
When Discretionary Housing Payments are made, NIHE make the decision about:
- When Discretionary Housing Payments are awarded
- How much is awarded
Discretionary Housing Payments are a temporary solution to financial difficulty. They may be made when people have been affected by the welfare changes like:
- The Benefit Cap
- Changes to Local Housing Allowance
To receive Discretionary Housing Payments, applicants must be eligible for Universal Credit help with housing costs.
Payments can cover ongoing rental costs but do not cover:
- Money towards mortgage payments
- Help with rates
- Ineligible service charges
- Increases in rent due to outstanding rent arrears
- Certain sanctions and reductions in benefit
This list is not exhaustive. Further information is available on the Northern Ireland Housing Executive website.
Supported exempt accommodation is accommodation provided by a statutory body, housing association, registered charity or voluntary organisation where that body or person acting on their behalf provides a claimant with care, support or supervision. This could include a hostel.
The housing costs for those in Supported Accommodation will not be met by Universal Credit and will continue to be met by the Northern Ireland Housing Executive.
If a Universal Credit claimant is living in temporary accommodation caused by homelessness or an emergency they will not receive a Universal Credit amount for housing costs. Housing costs for temporary accommodation are met by the Northern Ireland Housing Executive.