Direct payment of Housing Benefit to the tenant was introduced in April 2008. This report assesses the impact of the change and identifies issues that have emerged.

The change to direct payment was introduced to give housing benefit claimants the responsibility for managing their financial affairs. Most claimants were positive about direct payments and they felt in control and confident with regard to paying their rent and managing their personal finances. Where claimants were excluded from direct payment they expressed feelings of disempowerment. Some tenants experienced difficulties in balancing their household budget either due to insufficient income or past debts.

For some tenants, direct payment was a concern as it meant they could have large sums of money available in their account which was perceived as a possible temptation or at risk of being swallowed up by other demands on their income. The overall view was that the majority of claimants were managing their money well and paying their rent in full and on time.

The provision to transfer payments to the landlord when tenants are eight weeks in arrears was straightforward and worked well. But there was concern that the eight weeks arrears requirement was excessively long. At the end of this period tenants had great difficulty in repaying the debt. There is a case for transferring payments back to landlords sooner.

Tenants’ and advisers’ early experiences of the Local Housing Allowance national rollout is available from the DWP http://research.dwp.gov.uk/asd/asd5/rports2009-2010/rrep688.pdf