In the UK, people on low incomes have relied on housing benefit to help pay their rent.
But in 2012, the government introduced Universal Credit (UC) — the most radical reform of the UK's social security system for generations – which merges six existing benefits, including housing benefit, into one integrated benefit.
One of the biggest changes under UC, which is still being rolled out, was to the way housing benefit was paid to tenants in social housing.
Previously, housing benefit was paid directly to social landlords, whether a local authority or a housing association. But now it was to be paid directly to the tenant (‘direct payment’), who would then have to pay it on to the landlord themselves.
The government decided to pilot direct payment in six demonstration projects. We led a research consortium, also involving Ipsos MORI and the University of Oxford, which carried out the evaluation of the projects, highlighting how direct payment affected both tenants and social housing landlords.
Our research resulted in significant changes to the policy, benefiting both claimants and landlords.
The impact of direct payment
Our research found that most tenants encountered difficulties with direct payment, with many finding it stressful and a source of anxiety. And most tenants fell into rent arrears.
So why was this?
Well, some people did not understand the changes and fell into arrears unintentionally. Others underpaid their rent because they had encountered a financial ‘emergency’, such as a broken down car or washing machine, taking the rational decision to effectively borrow from their rent account.
One person we interviewed was told that her father had been taken very ill. She took a taxi to the hospital so she could be with him as quickly as possible, and the only money she had to pay for her fare was her housing benefit.