53 week rent year – DHP

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  • #286525
    liffe
    Participant

    Just wondered if anyone has given any consideration to the ‘missing’ week’s rent for UC claimaints who pay their rent weekly? During 2024/25 there will be 53 rent payment dates if their rent is due on a Monday and because UC calculate rent by multiplying the weekly rent by 52 weeks and dividing by 12, the claimant is short by one week. I have been asked to look at whether this can be covered by DHP but it is quite difficult to justify, particularly for those tenants who are in social rented accommodation and would normally have their rent covered in full by UC. I would be grateful for advice from anyone who has also been dealing with this issue.

    #286529
    Peter Barker
    Keymaster

    This myth resurfaces every few years. It’s rubbish. All the HAs who have stark warnings on their websites about the missing week’s rent are making themselves look foolish.

    No-one is losing a week’s rent from their UC because it’s a 53-week rent year.

    A UC assessment period can start on any day of any month. If someone happens to have an AP that runs from the 1st of the month, it is true that 53 rent payment days will occur during the 12 months from Monday 1/4/24 down to 31/3/25. 6/7 of the rent for the week beginning 31 March will be included in the UC AP beginning 1/4/25.

    The same is true of any 12-month period that begins on any Monday in any year (except when that period includes 29 February).

    For example, if your AP runs from the 10th of the month, the 12 APs beginning Monday 10 October 2022 ended on Monday 9 October 2023. Oh look, there were 53 rent days in that 12-month period! Were the HAs bellyaching about that? Of course not. The 12 months beginning 1/4/24 are no different.

    I cannot put it any better than Baroness Buscombe did last time the pitchforks were out in 2019:

    “No year contains 53 weeks. This perceived issue arises where a landlord charges rent weekly on a Monday and, because of the way the calendar falls every 5 or 6 years, seeks 53 rent payments in a year, with the 53rd payment in part covering the tenancy for the first few days of the following year.

    Universal Credit is paid on a monthly cycle. Where a tenant has a weekly rental liability, they will have to make either 4 or 5 rent payments in any one month. This means that claimants are ‘overpaid’ by UC in months where they have to make four rental payments and ‘underpaid’ where they make five. But over time this broadly balances itself out. It is impossible to accurately align weekly and monthly payment cycles at all points in time.

    Where a tenant makes a 53rd weekly rent payment on the last Monday of the 2019/20 year, only two days of that payment relates to a liability falling within that year (ie payment covering Monday and Tuesday of that week as Wednesday falls in the new year). Thus, five days of that payment is an advance payment for the following month and that month has only four Mondays and hence four rent payments. The combination of the advance rent payment and the ‘overpayment’ in April 2020 means that the shortfall is immediately recovered.

    There is a separate issue with respect to the way the calculation in the Universal Credit regulations converts a weekly liability into a monthly allowance. The conversion is achieved by multiplying the weekly rent by 52 and then dividing by 12. This effectively means one day’s rent a year (two days in a leap years) are not covered by UC. We are currently considering whether this formulation around weekly rents, and potentially other weekly amounts in the UC calculation, should be amended.”

    #286573
    Amanda JB
    Participant

    Hi Peter

    Regarding the last para here, would this not mean that every 5 years there would be a weeks rent short that has built up, or am in misunderstanding here?

    1 day short a year and 2 in the leap year = 7 days every 5 years

    #286597
    Peter Barker
    Keymaster

    Yes, the conversion of weekly rent to monthly UC leaves the claimant a tiny bit short in every month of every year and over 5/6 years it gradually accumulates to a whole week, if you remain on UC for that long.

    DWP say this is offset by the fact that weekly income is converted to monthly in the same way, which is advantageous to the claimant. This only helps claimants who have unearned income that counts for UC though: contribution based benefits, non-means tested benefits (mainly CA), private pensions and, for MACs, the older partner’s state pension.

    #287429
    aains01
    Participant

    Hi, my mind is blown – maybe it’s my age! Please can you help me explain this to my client as I can’t get it through my head!

    I have a customer – she is being charged rent this year from 1.4.24 to 6.4.25 – 53 weeks in total.
    She has 4 rent free weeks, so over this next rent year she is expected to pay £125.02 49 times, a total amount of £6127.45

    Her UC housing costs are being paid monthly at £500.20 – UCHC calculated as £125.05 per week x 48 weeks / 12 months – she will receive 12 payments over the year totalling £6002.40

    According to this calculation – she is underpaid by 1 week.

    #287433
    pbirks
    Participant

    but she got a housing element immediately before 1 April 2024 – and will carry on getting a housing element at the end of this year – you need to not look at ir as a yearly snapshot – you need to look at it as on ongoing rent charge with UC paying in monthly installments.

    She wont have a rent increase until 6 April 2025 – her UC award which includes that date wil include the new rent from the start of that assessment period. Shes likely to “win” a bit at that point.
    have a look at this thread on Rightsnet
    https://www.rightsnet.org.uk/forums/viewthread/19960

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