Plaid Cymru councillors have expressed concerns about the impact of rolling out Universal Credit for council tenants in Wrexham next month. They fear tenants could be forced to turn to loan sharks if payments are delayed.
Councillor Carrie Harper, who represents the Queensway ward, said: "The full digital roll out for Universal Credit has already happened in England. In Wales, only two local authorities have had full roll out, including Flintshire. What concerns me is that since full digital roll out in April 2017, rent arrears have increased by £40,000 in Flintshire."
The situation in England is worse with 89% of council tenants on UC reporting arrears.
The changes in benefit payments mean that councils will no longer receive housing benefit payments directly and there are concerns that this will lead to an increase in arrears for both council and private tenants who are facing financial difficulties.
Cllr Harper added: "Although there are a few individuals locally already on this new benefit, from October 4th all new applicants and anyone who reports a change of circumstances transfer over to UC. So we can expect numbers to increase but there are no figures or projections in terms of how many people this is likely to affect."
She said the uncertainty caused by the changes is a concern not just to tenants but those involved in tenancy support, advice services and estate office staff: "It's important that the right services are in places to support people otherwise we will be seeing people facing eviction for rent arrears. This next phase will put pressure on services at a time when many of these are facing financial uncertainty themselves.
"I think Wrexham has learned some lessons from Flintshire's experiences and I hope we can avoid a few pitfalls but there's huge uncertainty about all this. The worst aspect is the potential for payment delays - there will be a minimum six-week delay for people to get their money, the reality is probably a minimum of eight weeks I'm told.
"We've already had one eviction in Caia because of UC arrears. The chances are that every tenant who's moved onto UC will get a notice seeking possession as they'll be instantly in arrears. Staff will obviously give some leeway knowing people are waiting for payments but the letters go out regardless. Obviously it's very easy for tenants to build up arrears quickly because of the delays but also by spending their first payment because they've been waiting so long.
"It's very important that the council doesn't evict for these temporary payment problems."
She said the worst-case scenario would mean tenants being evicted, then placed in temporary accommodation but failing to get back on the housing list because they were in arrears.
Cllr Harper added: "This is a very costly situation that ultimately costs the council a lot of money. How many instances of this we're talking about I don't know but it's a likely outcome for anyone evicted from what I can gather.
"I'm already aware of people taking expensive pay-day loans to clear arrears because of UC. The real concern will be whether people are forced to go to loan sharks to tide them over."
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