The Department for Work and Pensions (DWP) offers an array of financial support that can help assist with rent arrears, including a Discretionary Housing Payment (DHP)
Benefit payments could provide additional financial assistance to help you settle your rent arrears. The Department for Work and Pensions (DWP) allows Universal Credit claimants to receive an extra amount to support housing, which can be paid directly to a landlord.
However, this extra payment is not automatic and claimants must take the steps to receive the support themselves. Depending on the size of their household, their age, and where they live, claimants could also receive extra support with rent.
If you are under significant pressure from those you owe money to, Citizens Advice suggests that you inform them that you’ve applied for Universal Credit and tell them when you are likely to receive it and whether they will accept a late payment and could freeze interest on your debts until you’re paid.
Below is an explanation of the different types of rent support you could receive depending on which benefits you receive and your living situation. If you’re behind on rent payments, here are the first steps you should take.
First steps you should take if you’re behind on rent payments
According to Citizens Advice, you should seek advice on dealing with rent arrears as soon as possible, as your landlord may resort to trying to evict you. If you receive Universal Credit, your landlord can request some of the payments to be paid directly to them as long as you’re two months or more behind on your rent.
However, even though the landlord is receiving these payments, you’re still obligated to make your regular rent payments. For some, a reduction in their full Universal Credit could mean they can no longer afford daily necessities.
If this happens, you can ring the Universal Credit helpline, which might be able to organise fewer payments to the landlord for rent arrears, meaning you receive more from your benefit. But beware, this could lead to the landlord being unhappy with what they receive from your Universal Credit, potentially leading to eviction.
The Universal Credit helpline can be reached by dialling 0800 328 5644.
Discretionary Housing Payment
Discretionary Housing Payments (DHPs) offer financial assistance to those struggling with rent or housing costs. If you’re currently on either Housing Benefit or the housing component of Universal Credit and need extra funds to maintain your accommodation, a DHP could be an option.
This discretionary payment can help cover a shortfall in rent, pay for rent deposits, or cover advance rent if you’re moving home. Applications should be made to your local council.
More information about applying for DHPs can be found here.
Budgeting loans
A Budgeting Loan is a unique type of loan offered by the DWP that could assist with rent payments. It’s only available to individuals who have been on certain benefits for the past six months.
However, not all benefits qualify you for this loan. For example, those currently receiving Universal Credit are ineligible.
But if you’ve transitioned from Universal Credit to Pension Credit, the time spent claiming the latter will count towards the six-month requirement. Your eligibility might also be impacted if you’re already repaying an existing Budgeting Loan or Crisis Loan.
Moreover, any funds received from a Budgeting Loan must be paid back. The amount you can borrow depends on your ability to repay the loan and your savings balance.
A key benefit of a Budgeting Loan is that it’s interest-free, so you only need to repay what you borrowed. Repayments are automatically taken from your benefits, with the repayment amount based on your income and affordability.
The government advises that repayments should be completed within two years of receiving the loan. You can apply for a Budgeting Loan on GOV.UK here.
Local Housing Allowance
Your living circumstances will dictate how much help you could get with rent. According to the DWP, your age and the number of people you live with will largely determine the support you receive.
If you live alone
If you’re a singleton under 35, you’ll typically only be able to claim for a single room in a shared house through the Local Housing Allowance shared accommodation rate (SAR). The amount you receive will depend on your location, but an online tool can help you work out your potential benefits.
This tool is also handy if you’re 35 or older and live alone, and planning to claim for a one-bedroom property.
If you live with a partner or family
For those living with a partner or family, the support you could get is based on how many bedrooms your family needs. However, if you share your home with someone aged 21 or over who isn’t your partner, your payment might be less – although certain benefits like Pension Credit or Attendance Allowance could exempt you from this reduction.
You can find full details of rent support available for private tenants on the GOV.UK website.