The Department for Work and Pensions (DWP) has issued fresh guidance for Universal Credit claimants who are falling behind on their rent, as new figures reveal the extent of the arrears crisis. This follows a parliamentary query that pushed the issue back into the spotlight.
The Scale of the Universal Credit Arrears Problem
Official statistics paint a stark picture of the financial strain faced by many on Universal Credit. According to the National Housing Federation, as of September 2025, a staggering 45 per cent of residents paying rent through Universal Credit were in arrears. This is significantly higher than the rate for those using other payment methods.
The House of Commons Committee of Public Accounts has been unequivocal, stating that the benefit system "causes financial hardship for claimants including increased debt and rent arrears, and forces people to use foodbanks." A major point of criticism is the initial five-week wait for a first payment. Citizens Advice highlighted in a 2024 paper that this wait is a significant source of hardship, forcing new claimants to survive without sufficient income or take out an advance loan that reduces future payments.
DWP Response and Available Support Routes
The matter was raised in Parliament by Tom Hayes, the Labour MP for Bournemouth East. He questioned what targets the DWP had for resolving housing arrears under Universal Credit. In a written reply on 12 January 2026, Sir Stephen Timms, the Minister of State for the DWP, responded.
While Sir Stephen stated that rent is a contractual matter between tenant and landlord and that the DWP does not monitor whether these contracts are being honoured, he outlined crucial support options. He confirmed that for vulnerable customers or those in arrears, the DWP can, if deemed in the claimant's interest, arrange for rent to be paid directly to the landlord and for an amount to be directed towards clearing arrears.
Understanding Alternative Payment Arrangements (APAs)
The key mechanism for this extra support is known as an Alternative Payment Arrangement (APA). These are designed for claimants who cannot manage the standard single monthly payment and where there is a threat of financial harm. The government expects most people to manage the monthly payment, but recognises some need help.
There are three main types of APA that claimants can explore:
- Split payments: An award can be divided between partners in a couple.
- Managed payments to landlords: Rent is paid directly to the landlord.
- More frequent payments: Payments can be made twice a month, or in exceptional cases, four times a month.
Use of APAs is growing. The National Housing Federation reported an increase from 29 per cent of claimants having an APA in June 2025 to 42 per cent by September 2025.
How to Apply for an APA and Ongoing Challenges
The government lists several circumstances where an APA might be considered, including if a claimant is in rent arrears, struggles to manage a monthly budget, finds it difficult to manage a joint household payment as a couple, or is vulnerable due to issues like addiction or previous homelessness.
However, the process is not without its difficulties. The National Housing Federation has reported that setting up APAs continues to be challenging for both residents and housing associations, with administrative hurdles and delays causing ongoing problems.
For Universal Credit claimants struggling to keep up with rent, proactively speaking to their work coach about their situation and exploring the possibility of an Alternative Payment Arrangement could be a vital step towards greater financial stability.
