Housing benefit payments will be sent directly to landlords after tenants have gone into two months of arrears during the Universal Credit (UC) pathfinders.

A circular published by the Department of Works and Pensions (DWP) said: “Landlords can refer rent arrears cases to Universal Credit; those which are under two months’ rent will trigger Universal Credit to contact the claimant to discuss their non-payment as part of the Personal Budgeting Support process, where as those with over two months arrears will be switched to direct rent payment automatically and relevant budgeting support activity arranged subsequently.”

UC, the government's mass reform of the welfare system, started for new claimants in Ashton-under-Lyne on 29 April.

The decision to abolish direct payments to landlords has caused alarm in both the private and social housing sectors.

The government has said that under UC direct payments to landlords will only be considered in exceptional circumstances.

UC will be rolled out across the rest of the country from October.

The move has been welcomed by the Residential Landlords’ Association (RLA).

Richard Jones, policy director of the RLA, said: “The RLA welcomes this new guidance to DWP staff, which represents a significant step-change in attitude by government; and, for the first time publicly acknowledges that direct payments to landlords are a crucial component of any welfare reform process.

“However, government promises of automatic direct payments do not yet extend to the national roll-out of universal credit later this year, and we are eager to ensure that it will apply when this happens.

"At the same time, the RLA will continue lobbying for a shorter time period in which automatic payments can be triggered, and for more details about the direct payments process. It is important for landlords to know that if tenants fall into arrears an immediate stop will be placed on further payment of housing costs to the tenant until direct payments to the landlord have been established."

A DWP spokesperson said: "Paying housing costs direct to claimants will allow them to take greater responsibility of their finances and breaks a barrier that people can face when moving into work. The safeguards in the pathfinder area have existed for private sector housing benefit claimants since 2008.  We have always been clear protection will continue under Universal Credit."