What’s a DSS tenant?
When choosing the right tenant for your property there are quite a few factors to consider. Will they treat the place well? Are they likely to stay long-term? Do they have pets? One of the most important questions to keep in mind is whether your tenants will be able to pay rent and if they’ll pay it on time.
Landlords can do all kinds of checks before agreeing to a tenancy. From employment references to your credit history, they’ve got a lot to check. But what do they do if their prospective tenant is unemployed? In this blog post, we’ve covered what you need to know about DSS tenants, how it might affect their tenancy, and how landlords often approach these tenancies.
What’s a DSS tenant?
Before jumping in you might be wondering what is DSS housing, or maybe even, what’s DSS altogether? DSS stands for the Department of Social Security, which was a government agency that was renamed the Department for Work and Pensions (DWP) in 2001. One of the roles of the DWP is to distribute housing benefits - these are an amount of money provided by the government to help the recipient pay rent.
A situation where someone might qualify for housing benefits is if they were unemployed or on a low income. It’s useful to know, however, that the housing benefits system is being phased out. It will be replaced by Universal Credit, which will encompass housing benefits and five other benefits programmes, including Child Tax Credit and Income Support.
So what does this mean when we’re talking about DSS tenants? Do they still exist if the DSS itself doesn’t anymore? The simple answer is yes - the Department of Social Security might be gone, but the label DSS is still around. Generally, it’s used interchangeably with housing benefits and Universal Credit to mean a tenant who will receive support paying their rent from the DWP.
How do DSS tenants pay their rent?
Now we’ve covered what DSS tenants are, the next question is how these tenancies work. How do landlords receive their rent - will it still be from the tenant themselves or directly from the government?
In general, the system of paying rent with a DSS tenant will hardly change from any other tenant you have. Their housing benefits will be paid to them by the DWP, and the tenant will then make their rent payment as stated in their Tenancy Agreement. In some situations landlords can organise for the housing benefits to be paid directly to them - this is called a Managed Payment To Landlord (MPTL) arrangement. This will normally only be arranged in situations like when the tenant not paying housing benefit to landlord.
In order to set up a MPTL the tenant must meet at least one of the following rules:
- They have missed their rent for 2 or more months
- They have underpaid their rent for more than 2 months and the amount they owe is at least 1 month’s rent
- They have previously used an MPTL arrangement
- They meet any of the Tier 1 and 2 APA factors, e.g. addiction problems, severe debt problems, or refugee/asylum seeker status
Wondering more about how rent works as a landlord? Read our blog on how much a landlord can increase rent for more details.
Does having a DSS tenant affect Landlord Insurance?
One factor landlords need to keep in mind is considering whether their property is insured. Landlord Insurance policies are designed for property owners who are renting out the property to tenants. And like anyone else, landlords will want to get the best cover for the most reasonable price. The question is, will renting the house to a DSS tenant affect your cover?
It’s good news there - typically insurance policies will provide you cover regardless of whether you rent to DSS tenants or not. With some insurers, you might have to jump through hoops answering lots of questions about the Tenant Type, but we’ve got more good news for you there - at Urban Jungle we’ll only ask you 3 questions about your tenant and you can answer them in under a minute!
Want to know more about Urban Jungle’s cover? Check out our policies!
If you are concerned about receiving rent from your tenant there are also additions you can add to your policy like Landlord Legal Expense cover, and Rent Guarantee. Urban Jungle’s Rent Guarantee covers up to £2,500 per month for unpaid rent for up to 6 months, and it includes a complimentary mediation service.
If you’re a DSS tenant yourself, you may be looking for cover that goes beyond what your landlord has insured themselves. In that case you might be interested in taking out a Contents Insurance policy. Gabbro’s Contents Insurance policy is designed specifically for tenants of social and affordable housing.
What does ‘No DSS’ mean when renting?
In the past, you may have come across properties listed as “No DSS tenants” - so what does this mean? In these cases, landlords would have been specifying that they would not rent their houses to tenants paying using housing benefits. You are no longer allowed to list your properties as “No DSS”, however.
In September 2020 it was ruled that it is unlawful to discriminate against tenants who are receiving benefits to help pay their rent. In other words, landlords and letting agents are not allowed to refuse a tenant purely because they are receiving benefits to help pay their rent. They also should not make assumptions on how suitable a tenant will be on the basis that they are a DSS tenant.
A few final tips…
If you are thinking about renting your property to DSS tenants let your local council know - it can be a great way to get a steady source of tenants. And if you’re open to DSS tenants you should definitely make it clear when you advertise your property.
Looking for more tips on being a landlord? Check out some more of our Landlord and Homeowner blogs:
