Can’t pay rent on Universal Credit

Struggling to cover rent while on Universal Credit (UC) is more common than you might think. If your housing payment doesn’t stretch far enough, or you’re already in rent arrears, there are practical steps you can take and support you may not know you can access.

In this guide, we explain what your housing entitlement includes, how to deal with rent shortfalls, and what help is available if you’re worried about your landlord or facing eviction.

How housing costs work on Universal Credit

When you claim Universal Credit, your monthly payment can include a housing element to help cover your rent. This is based on your individual circumstances, including your age, income, household size and where you live.

If you’re renting from a private landlord, the housing element is usually capped by your Local Housing Allowance (LHA) rate. This figure is set by your local council and reflects average rents in your area. In many cases, your actual rent may be higher than the LHA amount.

This is where the problem begins: many tenants find their UC not covering rent in full, leading to a rent shortfall each month.

If you’re renting from a council or housing association, the amount you receive might be more closely aligned to your actual rent but service charges or other fees could still leave a gap.

What to do if Universal Credit doesn’t cover your full rent

If there’s a rent shortfall on Universal Credit, you’re expected to make up the difference from your standard allowance or other income. Understandably, this can be a real stretch, especially with food and utility prices rising.

Here are some ways to manage a rent shortfall:

• Check your LHA rate

Use your postcode on gov.uk to see if you’re getting the correct housing amount.

• Speak to your landlord

Explain your situation early. They may offer a temporary payment plan or refer you to a support officer.

• Apply for a Discretionary Housing Payment (DHP)

If you need short-term help, your local council might be able to top up your rent with a DHP. These aren’t guaranteed, but they’re worth applying for if you’re struggling.

• Review your spending

It’s not always easy, but look for areas where you can cut back and prioritise rent over non-essential costs.

If you’re unsure what to prioritise, MoneyPlus has a helpful guide on recognising priority debts and how to handle them.

What is a Discretionary Housing Payment?

A Discretionary Housing Payment (DHP) is an extra amount you can apply for through your local council. It’s designed to help cover rent shortfalls, removal costs, or rent in advance for a new place if you’re moving.

To qualify, you must already be receiving either Universal Credit with a housing element or Housing Benefit. There’s no set amount, each case is reviewed individually, and DHPs are typically awarded for a limited time.

When applying, include as much detail as possible about your circumstances. Explain:

• Why you’re struggling to pay rent
• What steps you’ve already taken
• What could happen if you don’t receive help.

Decisions usually take a few weeks, but you can ask for a review if your application is rejected.

What if you’re in rent arrears?

Rent arrears can build up quickly if you’re not able to cover the shortfall. If this happens, your landlord could eventually start eviction proceedings but this is a last resort.

Here’s what to do if you’re behind on rent:

• Don’t ignore it. The earlier you take action, the more options you’ll have.
• Talk to your landlord. See if you can agree on a repayment plan.
• Contact your council. They may be able to mediate with your landlord or help with a DHP.
• Get debt advice. Rent arrears often come with other financial worries. At MoneyPlus, we can help you create a manageable plan.

We’ve also put together a detailed article explaining what happens when you fall behind on rent, including your legal rights and what steps landlords can take.

Dealing with your landlord while on Universal Credit

It’s common to feel anxious about talking to your landlord if you’re behind on payments. But staying silent usually makes things worse.

When speaking with your landlord:

• Be honest and upfront about your situation.
• Let them know what steps you’re taking to get back on track.
• Keep a written record of all communications.

If your landlord is aggressive or threatening, you can seek support from Citizens Advice or your council’s housing team. There are strict rules landlords must follow – they can’t just change the locks or force you out without a court order.

Can Universal Credit pay your landlord directly?

Yes. If you’re struggling to manage your money or have built up rent arrears, you can request an Alternative Payment Arrangement (APA). This allows the housing element of your Universal Credit to go straight to your landlord each month.

APAs are agreed through the Department for Work and Pensions (DWP), and either you or your landlord can request one.

This setup can take some of the pressure off, especially if you’re finding it hard to budget. It doesn’t increase the amount you get, but it ensures your rent is paid before anything else.

What if you need to move?

If your current rent is unsustainable, it might be worth looking for a more affordable property. That said, moving comes with upfront costs – deposits, new furnishings, transport – which can be hard to cover when you’re already stretched.

If you need help moving:

• Your council may offer a DHP for rent in advance or a deposit
• Some charities and housing support services offer grants
• You might be eligible for a budgeting advance from UC.

Be sure to factor in travel costs and access to services when considering a new property. Saving a few pounds in rent won’t help if the new place leaves you isolated or with higher utility bills.

Getting help with other debts

Rent problems often don’t happen in isolation. If you’re juggling other payments, like credit cards, loans, or council tax, it might be time to get professional advice. 

You can visit MoneyHelper for free, impartial advice or contact our debt experts at MoneyPlus. We offer confidential, non-judgmental advice to help you find a manageable budget that works for you.