DWP and DSS Tenants – A Landlords Guide to Housing Benefits

Renting to DSS tenants can be a good way to minimise vacancies for your buy to let property. However, they also come with potential downsides. As such, landlords and property investors need to know the ins and outs of how to find and secure DSS tenants as well as the potential pros and cons of targeting this segment of the rental market.

What is a DSS/DWP tenant?

DSS stands for Department of Social Security. DSS tenants then are people that receive housing benefits from the council to support them through periods of financial difficulty. Typically this is due to unemployment, disability, or single parents status.

These housing benefits are provided by the government in the form of a monthly allowance for living expenses which also include contributions towards their rent. DSS or Department of Social Security was officially renamed DWP (Department for Work and Pensions) in 2001. However, the term DSS has stuck around since then. It’s important to note that DSS in this context refers to the same thing as DWP.

The Process for Securing DSS Tenants

The process to secure a DSS tenant is much like getting a regular tenant however there is one additional step involving the pre-tenancy determination form.

The tenant will need to enquire as normal, you’ll want to organise a viewing, and if the prospective tenant likes the property and the landlord is happy to proceed then a pre-tenancy determination form needs to be completed and handed to the tenants housing officer.

The council will then determine the house value and assess the tenant’s situation before making a rental offer. This rental offer will cover part or even all of the rent amount depending on the circumstance and the cost of the rent.

Once this step has been completed, the landlord will need to draw up a tenancy agreement as normal, and the tenant will be will need to review and sign it. At this point, the tenant’s housing officer will also typically ask for a copy of the tenancy agreement or at least want to view it once everything is signed, then payments can begin.

Each local council operates slightly differently. Most of them will pay the housing benefit allowance to the tenant themselves and the tenant will be responsible for paying their rent. However, some councils may allow direct payments to the landlord.

This is often dependent on the tenant’s situation as some tenants may be more suitable for managed payment arrangements. You can find out more about managed payments and how to apply at Gov.UK.

Understanding DSS Income and Housing Benefits

DSS income refers to government benefits received by tenants that help cover housing costs. These can include:

• Housing Benefit – for tenants on a low income, retired, or with disabilities
• Universal Credit – which may include support for housing costs for eligible claimants
• Local Housing Allowance (LHA) – calculates the maximum benefit based on property location and household size

Can DSS income fully cover rent?

• The amount a tenant receives depends on LHA rates and their individual circumstances.
• Often, DSS income does not cover the full rent, meaning tenants may need to pay the difference.

What's The Difference Between Housing Benefit and Universal Credit?

Housing Benefit is gradually being replaced by Universal Credit, the government’s new system for delivering housing support.

• Housing Benefit is paid by local authorities, typically every two or four weeks.
• Universal Credit is paid monthly by the central government.

Introduced in 2013, Universal Credit was designed to simplify the benefits system by replacing six legacy benefits, including Jobseeker’s Allowance and Child Tax Credit. Anyone applying for support for the first time now receives Universal Credit instead of these legacy benefits.

The housing element of Universal Credit is a means-tested benefit to help tenants on low incomes pay their rent. Eligible renters—whether in work or out of work—can claim this support. The amount is determined by the Local Housing Allowance (LHA), which sets rent limits for private rented properties based on size and location.

How are Local Housing Allowance (LHA) levels set?

LHA levels are calculated using the 30th percentile rent for different property sizes within each Broad Rental Market Area (BRMA).

• A BRMA is a geographic area grouped by similar rental markets, used to set fair rent levels for housing benefit purposes.
• The 30th percentile means that 30% of available properties of that size in the area are at or below this rent level, ensuring tenants have access to affordable housing that meets their needs without necessarily being the cheapest option.
• LHA rates are set by the Department for Work and Pensions (DWP) using data from the Valuation Office Agency (VOA).

Currently (as of November 2023), LHA rates are frozen at March 2020 levels, based on rents surveyed in 2018/19. Many campaigners argue this no longer reflects real rental costs:

• Shelter reports that in nine out of ten areas, support lags behind actual rents.
• NRLA research shows only 15% of landlords letting at LHA rates intend to continue after the current tenant leaves, with almost a quarter planning to sell. Nearly 60% plan to re-let but cannot maintain LHA-level rents.

This demonstrates that the issue is not landlords’ willingness to provide affordable housing, but that LHA rates are insufficient to cover current market rents.

Changes to Local Housing Allowance levels

In his Autumn Statement on 22 November 2023, Chancellor Jeremy Hunt announced that the LHA would be unfrozen from April 2024, increasing to the lower 30% of rents nationwide.

• This will benefit the lowest-income tenants and support landlords in continuing to let to benefit recipients, who may currently be paying below-market rents.

NRLA CEO Ben Beadle welcomed the change:

"Freezing housing benefit rates was always a disastrous policy, hitting many of the most vulnerable tenants. Reversing this provides vital support for tenants on LHA and helps sustain rental tenancies."

Can Landlords Refuse DSS Tenants? – Guidance Under the Renters’ Rights Act 2025

The term “DSS tenants” comes from the now-defunct Department of Social Security and has historically been used to describe tenants receiving housing benefit or other welfare income. Many letting adverts previously carried discriminatory “No DSS” or “No benefits” wording.

While landlords have the right to select tenants, blanket bans on DSS tenants are now considered discriminatory. Courts have ruled that “No DSS” policies may breach the Equality Act 2010, and letting agents cannot refuse applicants solely because they receive benefits. Landlords are encouraged to assess affordability on a case-by-case basis rather than using blanket restrictions.

Under the Renters’ Rights Act 2025:

• It is unlawful for landlords or letting agents to impose blanket bans on tenants who receive benefits or have children.
• The prohibition covers both overt practices (e.g., “No DSS” adverts) and indirect discriminatory practices, such as requiring higher deposits or advance rent payments specifically for benefit-receiving tenants.
• Landlords and agents must evaluate tenancy applications individually, considering income and affordability, rather than making decisions based solely on benefit status.
• The Act applies across England, Wales, and Scotland, though enforcement mechanisms differ by region.
• Local housing authorities can impose financial penalties on landlords or agents who breach these discrimination rules, with fines of up to £5,000 in England.

This legislation aims to reduce barriers for tenants on low incomes while ensuring landlords still make informed, fair decisions.

What to Know Before Accepting DSS Tenants

As a landlord, it is your responsibility, whether they are a DSS tenant or not, to thoroughly vet potential tenants and ensure that they can afford their rent regardless of how they are meant to pay it.

The process of screening and referencing your tenants could include running an affordability check and asking for references from previous landlords. And of course, you’ll want to make sure that they have the ‘right to rent’ in the first place.

If a potential tenant has a history of problems keeping up with their rental payments then it may be worth investigating managed payments before dismissing their application.

When it comes to finding a DSS tenant one solution is to get in contact with your local council and let them know. Many local authorities don’t have enough housing stock. And so they often rely upon private landlords to cover these surplus accommodation needs.

If this is the case with your local council, then they may very well be able to supply you with a steady source of tenants. Similarly, if you are interested in renting to DSS tenants, then make sure that when you’re advertising online that you’ve made it clear that you’re open to applications from DSS tenants.

What Can a Landlord Do if a DSS Tenant Stops Paying Rent?

There could be many reasons why any tenant might fall behind on the rent. Often it is to do with personal circumstances getting in the way.

If you have a tenant that receives housing benefits or Universal Credit and they stop paying then you can likely apply for managed payments. As already mentioned before, a managed payment essentially means that you will receive the rent payment directly from the DWP as opposed to it going through the tenant. In order to make a claim, your tenant needs to have missed at least two months’ worth of payments so far.

If you don’t want to investigate managed payments, then your only other alternative is to go through an eviction. To do this you will need to follow the usual procedures (for instance, using a section eight notice.)

Related: What Can Landlords Do When The Tenant’s Rent is Late?

DSS/ DWP Tenants: Final Words

DSS tenants have historically had it tough. The majority of landlords are unwilling to rent to them simply because of the potential complications that might arise.

On top of this, DSS tenants as a whole have a bit of a bad reputation. However, there are numerous legitimate and responsible tenants that desperately need housing. And by serving this underserved market you can reduce the chances and times of vacancies.

Plus, by understanding the rules surrounding things like managed payments and the process of securing tenants you can also mitigate (though not get rid of) potential risks surrounding renting to DSS tenants such as rent arrears or rogue tenants.

Ultimately, though, whether or not you select DSS tenants for your rental comes down to your personal situation and whether or not your property is suitable.

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