Rent-to-rent tenants face ‘scandalous’ Universal Credit clawback, it is reported

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Sub-letting tenants who started receiving Universal Credit during the pandemic are fighting repayment requests from the Department of Work and Pensions.

A national newspaper has reported that they have been wrongly told they must pay back more than £5,000 of benefits awarded at the start of the pandemic after the DWP began retrospectively reassessing claims and decided that many with rent-to-rent arrangements weren’t entitled to the benefit. Housing charities have warned that a swathe of claimants are likely to face incorrect penalties.

The number of private renters claiming Universal Credit soared from 749,000 to 1,549,000 between March 2020 and February 2021, as certain vetting procedures were suspended due to Covid. 

The i newspaper reports that Mick Vokes, 48, from Eastleigh in Hampshire was told to repay £5,300 in housing benefit approved at the start of the pandemic for his £600-a-month rent, as the DWP said he was not eligible because he did not have a tenancy agreement for his sub-let property.

Tenancy agreement

Vokes said: “If I had known that I needed a tenancy agreement I would have moved out and found somewhere else, but at no point did [the DWP] tell me it was necessary.”

The DWP has since apologised for the error. According to one housing expert, its policy of requiring a tenancy agreement as proof of renting has no legal basis.

A DWP spokesperson said: “At the onset of the pandemic we rightly suspended certain verification processes as we could no longer see customers face-to-face. However, we made customers aware that we may return to seek this verification in the future, which we have done in these cases.”

Bill Irvine at Universal Credit Advice tells LandlordZONE that with Universal Credit, any overpayment is potentially recoverable but that the DWP could have asked landlords to provide validation.

“It’s one thing if someone has provided a false tenancy agreement and misrepresented themselves, however, with these cases it’s not a proper revision and the DWP don’t have the right to cancel a claim – asking people to repay money is scandalous,” he says.

Read more about Universal Credit.

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