Universal Credit — Process for claiming Alternative Payment Arrangements
A how-to guide on the process of claiming Alternative Payment Arrangements
Universal credit is normally paid monthly, in one lump sum (including housing costs) to one nominated person. It is possible to ask for an alternative payment arrangement (APA) at any point in a universal credit (UC) claim. APA arrangements should always be considered when helping a ‘vulnerable’ client claim UC. It is best to ask for an APA at the beginning of the UC claims process. This document explains this process.
Types of APA
There are 3 types of APA
- Payments made other than monthly.
- Payments made directly to a third party (normally rental payments to a landlord).
- Payments made to one partner in a couple or in split payments to both partners.
Circumstances where an APA might be arranged
Whether or not to make APA is at the discretion of the DWP. The DWP has published guidance on using this discretion. This guidance suggests circumstances when an APA may be appropriate. As this is only guidance, it doesn’t prevent a client asking for an APA in other circumstances.
The circumstances outlined in the guidance are divided into Tier One factors which make it highly likely/probable that a UC claimant will need an APA and Tier Two which make it less likely, but possible, that a UC claimant will need APA.
Tier One factors are:
Drug/alcohol and/or other addiction problems e.g. gambling
Learning difficulties including problems with literacy and/or numeracy
Severe/multiple debt problems
In temporary and/or supported accommodation
Homeless
Domestic violence/abuse
Mental health condition
Currently in rent arrears/threat of eviction/repossession
Claimant is young: a 16/17 year old or a care leaver
Families with multiple and complex needs — including families enrolled on the ‘troubled’ families programme
Tier Two factors are:
Third party deductions in place (eg for fines, utility arrears, etc)
Claimant is a refugee/asylum seeker
History of rent arrears
Previously homeless and/or in supported accommodation
Other disability (e.g. physical disability, sensory impairment, etc)
Claimant has just left prison
Claimant has just left hospital
Recently bereaved
Language skills (e.g. English not spoken as the ‘first language’)
Ex-Service personal
NEETs — not in education, employment or training
The guidance considers each of these circumstances in detail.
A request for an APA can be made by the UC claimant or their representative. An APA arrangement will only be considered for those claimants who cannot manage the single monthly payment and, as a result, there is a risk of financial harm to them and/or their family. Relevant factors are:
- Failure to pay bills or rent arrears
- Inability to budget monthly
- Whether there is a risk of financial abuse
The priority order of an APA are direct payment of housing costs, followed by more frequent than monthly payments and then split payments between couples.
Direct payment of housing costs
This will be considered where the claimant is:
- In arrears with their rent for an amount equal to, or more than, two months of rent
- Has continually underpaid their rent over a period of time and they have accrued rent arrears equal to or more than one month’s rent
- A claimant in receipt of housing benefit paid to the landlord requests their housing costs to continue to be paid to their landlord under UC providing they meet Tier 1 or Tier 2 factors
- Any of the other Tier 1 and Tier 2 factors apply
In the case of rent arrears proof of the amount of the arrears will need to be shown.
More Frequent Payments
Where it is identified that a claimant may find it difficult to budget monthly, UC can be paid fortnightly or, exceptionally, four times a month. In these circumstances any housing costs payment would also be made directly to the landlord.
Split Payments
In exceptional circumstances, payments of UC can be divided between two members of a household. Split payments are to prevent hardship to the claimant or their family. They will be considered in situations such as domestic violence or where financial abuse occurs and one partner mismanages the UC payment. A larger percentage of UC will be allocated to a person with primary caring responsibilities such as childcare. The decision maker will also consider whether to make a direct payment to the landlord if housing costs are included in the claim.
Other benefit entitlement
Clients who meet the conditions for an APA will often have complex needs. In particular it is likely that a significant number of these clients will have mental health issues and learning difficulties. It is important to consider whether they need further benefit advice to claim disability benefits like personal independence payment. You may wish to refer a client for further help to claim disability benefits.The client might also need ongoing help with budgeting and debt advice and this might require a referral to other workers or agencies.
How to apply for an APA
There are no set rules for applying for an alternative payment. You will need to highlight the need for an APA when assisting someone with a claim for UC. The client should take any evidence of this need to their first UC interview. This might be a letter from a support worker or details of the client’s mental health problems or evidence of rent arrears. You may want to detail the client’s need for an APA in a covering letter.
A landlord can apply to the DWP for direct rental payments if a UC claimant is more than two months in arrears with their rent. The landlord can do this by completing form UC47.
Challenging a refusal to make an APA
If the DWP refuse to allow an APA there is no right of appeal against this decision. The DWP should, however, exercise their discretion fairly and in accordance with their obligations under the Equality Act and the Human Rights Act. Cases of unjustified discrimination against a client will be unlawful and this should be pointed out to the DWP in the case of refusal. If the DWP breach their own guidance in refusing to apply an APA, you should ask them to reconsider their decision and alert them to the part of the guidance that indicates that an APA should be allowed.
Rachel Ingleby works in the Welfare Benefits Expert Advice Team at Citizens Advice.
