Credit Union

Gateway Credit Union

Gateway Credit Union

Torfaen County Borough Council and Monmouthshire County Council are working with the Wales Co-operative Centre to promote the Gateway Credit Union service to landlords and tenants throughout Monmouthshire and Torfaen. 

A Credit Union Rent Account helps tenants to manage their finances, by ring-fencing the Housing Benefit payment and forwarding it directly to the landlord. 


 

What is a Credit Union Rent Account?

Gateway Credit Union offer a rent account service to landlords and tenants called a 'Simple' Account. The account is designed to help a tenant manage their finances, especially if they receive Housing Benefit. A housing benefit claimant will tell the local authority that they want their benefit paid into the rent account. Once they have set this up, the authority will pay the benefit into the account, where it will be sent directly to the private landlord’s account. This means that the claimant has less direct access to the benefit, and they can be sure that it is used for rent, helping them to budget for other living costs. 

Paying LHA through Credit Union Rent Accounts has the backing of key organisations including your Council, the Welsh Government, the National Landlords Association, Shelter, the Chartered Institute of Housing, Citizens Advice and Cymorth Cymru.

What are the benefits to Landlords?

It safeguards rent

If you feel that your tenant may be struggling with their finances, help support them now by introducing them to Gateway's rent account service. This will help them to prioritise the Housing Benefit for rent before they go into arrears. 

It's easy to arrange 
Once a tenant is Gateway Credit Union member, setting up a rent account and nominating that the Housing Benefit is paid into that account is easy to arrange, compared with the process for applying for Direct Payment with a Local Authority. 

It makes business sense
Even with a small account fee, operating a Credit Union rent account makes business sense and assures you that rents will be received regularly and on time. 

Its forward thinking
The UK Government intends to introduce Universal Credit in October 2013. All new claims for Housing Benefit, and most other working age benefits will be combined into one claim, paid monthly to the claimant via BACS. Only in very limited circumstances will the housing elements be separately identified and paid directly to landlords. Those already in receipt of benefits will transfer to the new system from October 2012. This means it will be much harder in future to request that any benefit paid for rent is paid directly to you. By acting now, and supporting your tenant to use an account, you can make the transition to Universal Credit a lot easier. 

Reducing Risk
Wales Co-operative Centre's Landlord Risk Calculator is useful to help private landlords understand the cost benefit of the Credit Union Rent Account scheme vs. current and likely exposure under Housing Benefit rules and the potential impact of Universal Credit starting from October 2013.

What are the benefits to tenants?

Basic bank accounts can appeal to people who are worried about overspending, as they also do not allow the customer to go overdrawn.  However, where there are standing orders or direct debits and there is not enough money in the account to pay them they will be rejected and the customer will be charged. In addition, many people do not have and cannot get a bank account into which Local Housing Allowance can be paid. The Credit Union rent account therefore offers an alternative. 

How can I set up a Rent Account with Gateway?

In order to open a credit union rent account, first the person must usually become a member of the credit union. Then they need to tell the local authority where to pay the housing benefit, and give the credit union the private landlord’s bank details so they can make the payment. The landlord will have to pay a small administration fee for this service. 

Landlords and tenants interested in using this service should contact the Gateway Credit Union for more information.

Call Gateway: 01495 750020
Visit us:  21 Commercial Street, Pontypool, NP4 6JQ
Website: www.gatewaycu.co.uk
E-mail: info@gatewaycu.co.uk

More Information

The Wales Co-operative Centre is working on a Tackling Homelessness Through Financial Inclusion (THFI) project which aims to support private landlords, tenants and credit unions to use Credit Union Rent Accounts. The THFI Toolkit holds a range of resources and information for landlords and tenants on Credit Unions. Landlords and tenants are encouraged to use the toolkit to find out more about the benefits of using a Credit Union Service.

Visit: Tackling Homelessness Through Financial Inclusion Toolkit (THFI)

Gateway Credit Union

Wales Co-operative Centre

Credit Union Rent Accounts