Rent payment and collection under Universal Credit
August 21, 2013
If you haven't yet read the CIH's guidance on rent payment and collection under Universal Credit, I suggest you make it a priority.
The guidance contains a wealth of best practice and urges landlords to review their rent collection practices to ensure they are financially inclusive and that they provide robust advice and support about banking products ahead of the "enormous shift in payment culture" under Universal Credit.
With the Government's default position to pay Universal Credit monthly in arrears and directly into bank accounts, it was interesting to learn that some landlords have struck agreements with banks to act as ID verifiers for those wishing to open basic bank accounts.
The guidance states "These barriers have led to some social landlords taking on a third party intermediary role in which housing staff have a delegated ‘Trusted Partner’ status within the terms of a formal agreement between the landlord and a bank (this need not of course be the landlord’s business bank or development lender). This facility gives the housing staff the capacity to verify ID and address criteria, and authorise or ‘open’ new basic bank accounts. For example, Prospect Community Housing (Edinburgh) and Wishaw and District Housing Association both have trusted partner status with the Royal Bank of Scotland."
In reviewing rent collection strategies, the guidance asks questions such as:
- Can you offer a smartphone App for tenants to pay rent, order direct debit forms or set rent payment reminders?
- Do you need to invest in hand held mobile technology for housing staff to use on home visits?
- How can you encourage tenants to use the most cost effective products that offer you and them better financial resilience, and what incentives can you offer or broker?
- Do you offer frequency variation for direct debits as Universal Credit claimants could be paid on any day of the month?
As a key provider to local authorities and housing associations on rent collection, allpay has stressed the need to offer the full range of payment options to residents ahead of Universal Credit.
Where we've been able to support organisations ahead of the changes is by providing a flexible direct debit service - which can collect payments on every date of the month - minimising the risk of arrears and have recently developed the functionality of our mobile Payment App allowing income officers to take card payments when visiting households. Both of which were highlighted in the report (below):
"Payment of rent with an iPhone or Android device is becoming increasingly popular because of an ‘App’ from allpay that enables payment from a phone. Using allpay from a smartphone is the same secure environment as when making payments from a computer.
"The App is available on the Apple App Store or from Google Play and is free to tenants to download and use, providing their landlord has formally signed up to allpay’s internet payments.
"Social housing providers can make the barcodes available on their main websites and on rent payment pages, to make it easier for tenants to download the app. They can also use the bar code in newsletters and correspondence."
In a bid to help residents budget through the changes we've also developed a mobile Pay as you Go SIM proposition allowing residents to save money towards their rent every time they top up their mobile. More on this here.
You can access the full report here.