Part-time workers judged to be doing too little to find full-time work face having their benefit for housing costs sanctioned by the government for the first time under universal credit.

Under the present system housing benefit is paid direct to landlords and sanctions can only be applied to out-of-work benefits, such as jobseeker’s allowance or employment support allowance.

Landlords, already concerned by the prospect of universal credit being paid directly to tenants, have been lobbying the government to exempt the housing element of the single payment from sanctions in all circumstances.

However, the Department for Work and Pensions has confirmed to Inside Housing that under the government’s flagship welfare reform, where a tenant is working less than 35 hours a week at minimum wage and is not eligible for JSA or ESA, the housing element can be sanctioned instead.

Landlords are concerned that by extending ‘in-work conditionality’ to the housing element, if the DWP deems claimants to not be doing enough to find full-time employment and applies sanctions, rent arrears could increase.

Sue Ramsden, head of policy for neighbourhoods at the National Housing Federation, said that until now, it has been unclear whether the DWP would allow housing costs to be exempt. ‘We are pressing for DWP staff to have regard for the need for an alternative payment arrangement to be put in place at the same time that the sanction is imposed,’ she said.

Sam Lister, policy and practice officer at the Chartered Institute of Housing, said there was concern about the effect of sanctions on arrears at a time when the housing benefit caseload for in-work claimants continued to rise, but much depended on how the policy was implemented. He added: ‘It will depend on the instructions given to DWP administrators about how strictly the sanctions are implemented in the case of part-time workers who are in receipt of benefit as a contribution to housing costs.’

No research has been carried out on the impact sanctions could have on arrears. More than 1 million people are currently in work but reliant on housing benefit to meet their housing costs, up from 691,000 in 2010.

A DWP spokesperson said: ‘It is only right that people claiming benefits should be aware that not sticking to the rules can have a consequence. Any reductions to benefits as a result of a sanction are applied to the universal credit benefit as a whole rather than a particular element of it.’