The Department for Work and Pensions (DWP) is revisiting claims it approved without undertaking standard verification processes due to the coronavirus pandemic.
This means private renters on Universal Credit could be asked to repay thousands of pounds as part of checks being made on claims during lockdown.
During face-to-face interviews with the DWP, claimants must provide verifications, such as a copy of their tenancy agreements, but these interviews were suspended at the start of lockdown.
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Instead, many new claims for Universal Credit were set up online and over the phone because they couldn’t visit a JobCentre.
Private renter Tina Newman, 40, told the i she has been asked to repay £5,372 of the housing element of her Universal Credit because she doesn't have a tenancy agreement.
She pays her rent and bills to one of her housemates instead of directly to the landlord in what is known as a “rent-to-rent” arrangement.
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Ms Newman, who lives in Essex, did have bank statements to show her rent being paid to her housemate, but the government doesn’t accept this as an official form of rental liability.
The DWP would accept a written letter from her landlord as proof, but the landlord - who has not been named - has refused to provide one and denies Ms Newman lives at the property.
Ms Newman says the DWP didn’t ask for a tenancy agreement as part of her verification process when she first claimed for Universal Credit in March after losing her job.
Alice Devoy, a caseworker working with Ms Newman, who plans to appeal the decision, said there has been a 100% increase in rent-to-rent arrangements over lockdown.
Ms Devoy said: “Refusing to provide housing benefit to those without a tenancy agreement is discriminatory.
“We are concerned that this DWP policy will be particularly harmful for those in unlicensed properties.”
It is impossible to know how many private renters do not have a tenancy agreement as the "shadow renting" sector is notoriously difficult to collect data on.
A DWP spokesperson told The Mirror that Ms Newman did not declare she was sub-letting without a tenancy agreement, which would make her ineligible for the housing element of Universal Credit.
They said: "This means that she has been paid money that she was never entitled to, and we are seeking to correct this whilst offering support to ensure that repayments are affordable.
"Ms Newman has now asked us to relook at her case, and we have agreed to do so."
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