Universal Credit loophole that could help you get a ‘alternative payment’ deal to help pay housing costs

MILLIONS of households on Universal Credit could get extra help to pay for their housing costs through a little-known loophole.

Universal Credit was introduced to simplify the benefits system by replacing six so-called legacy benefits with a single monthly payment, designed to mimic the structure of a monthly salary.

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However, for vulnerable individuals or those facing particular challenges, there are additional support options available, known as alternative payment arrangements (APAs).

These arrangements, which are not widely publicised, can provide tailored assistance to those who need extra help managing their finances.

Claimants can request payments to be made directly to their landlord, split payments between partners in a household, or even receive their Universal Credit more frequently than once a month.

These measures aim to ease financial pressures and ensure support is accessible for those in special circumstances or who may be deemed at greater risk.

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Here we explain hot you can get the additional support if you're struggling on Universal Credit.

Direct payments to landlord

One of the key elements of Universal Credit is housing support, which is typically paid as part of the claimant's monthly payment.

This means most people are responsible for paying their rent directly to their landlord.

However, for those who may struggle with this responsibility, there is the option to request a managed payment, where the housing portion of Universal Credit is paid directly to the landlord.

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This arrangement can provide peace of mind for claimants who are worried about falling behind on rent and can also help landlords ensure timely payment. 

It’s worth noting, however, that if the housing element you get doesn't cover the full rent amount, you'll still responsible for paying the remaining balance themselves.

To qualify, a managed payment can usually be made when:

• A claimant is in arrears with their rent for an amount equal to, or more than, two months of their rent
• A claimant has continually underpaid their rent over more than two months, and they have accrued arrears of an amount equal to or more than one month's rent
• A claimant previously received housing benefit and it was paid to their landlord

Either the claimant, or their landlord can make the request.

If the claimant is making the request, this can be by:

• Using their online Universal Credit account
• Talking to their work coach or case manager
• Phoning Universal Credit on 0800 328 5644

Following a request for a managed payment a decision will be made whether or not a managed payment is appropriate and both the landlord and claimant will be informed of the decision.

What are the other alternative payment arrangements?

If you’re finding it difficult to manage your finances with a single monthly Universal Credit payment, you may be eligible to receive your payments weekly or fortnightly, particularly if you’re dealing with significant challenges.

You'll usually qualify if you have:

• Drug and alcohol problems
• Learning disabilities
• Severe debt problems
• Living in temporary or supported accommodation
• Current homelessness
• Domestic violence or abuse
• Mental health problems
• Being in rent arrears or under threat of eviction or repossession
• Age 16 or 17 or who have left local authority care
• Families with multiple and complex needs

If you believe you're eligible, speak to your work coach and explain your situation.

However, it’s important to note that more frequent payments are only granted in very exceptional cases.

The DWP will make the final decision, which cannot be appealed.

You'll also need to demonstrate that you're unable to manage the standard single monthly payment.

If approved, your payment arrangement will be reviewed regularly to assess whether it's still needed.

In certain situations, couples who share a Universal Credit claim can request to have their payments split between them.

This option is designed to protect vulnerable individuals, such as:

• Claimants experiencing domestic abuse
• Cases where one partner is mismanaging the household’s Universal Credit payment

Split payments aim to prevent financial hardship for the claimant and their family.

In such cases, the larger portion of the payment is typically allocated to the partner with primary caring responsibilities.

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Again, split payments are only approved in very exceptional circumstances, and the DWP will decide if this arrangement is appropriate.

If you think this applies to you, speak to your work coach about whether you may qualify for this type of support.