Referencing tenants on benefits or Universal Credit: what the law says and how to check affordability fairly

Short answer: Since 1 May 2026, landlords and anyone acting for them in England must not do anything that makes a person less likely to rent a property because they get benefits or have children. You can still reference a tenant on Universal Credit and check they can afford the rent, but you must count benefit income in the same way as wages and apply the same test to everyone. A council can fine you up to £7,000 for a breach.

What the law now says

The Renters' Rights Act 2025 brought in rules against "rental discrimination". GOV.UK's guide for landlords says that if you're a landlord in England, you must not do anything to make a tenant less likely to rent a property, or prevent them from renting it, because they have children or get benefits.

Key points:

• Start date: the rules apply to assured and regulated tenancies on and from 1 May 2026, whether agreed before or after that date ( GOV.UK ). Section 40 of the Act came fully into force on 1 May 2026 ( legislation.gov.uk ).
• Who it covers: you and anyone acting on your behalf, including letting agents, referencing services, friends and family.
• Which tenancies: properties let on assured tenancies, except social and supported housing.
• Contract terms: terms in tenancy agreements, mortgages and superior leases that could be used to discriminate are cancelled. Discriminatory terms in insurance contracts are cancelled where agreed or renewed on or after 1 May 2026.

What counts as "benefits"

GOV.UK lists examples including Universal Credit, Jobseeker's Allowance, Personal Independence Payment, Employment and Support Allowance, Income Support, Housing Benefit, State Pension and Pension Credit, Council Tax Support, Tax Credits, Child Benefit, Guardian's Allowance and Carer's Allowance.

The penalties

Under section 40 of the Act , a local housing authority can impose a financial penalty of up to £7,000. If the discrimination continues more than 28 days after the final notice (or after an appeal ends), a further penalty can be imposed. If there's a repeat breach of the same section within five years, an additional penalty of up to £7,000 can be added.

Does this apply in Wales or Scotland?

GOV.UK's guidance is for landlords in England. [FACT-CHECK: confirm the position for Wales and Scotland before publishing; section 40 is marked E+W on legislation.gov.uk but the GOV.UK guide covers England.]

What you can still check

The ban doesn't stop you referencing. GOV.UK says that if you check whether a tenant can afford the property, you must include income from benefits in the same way as other income ( GOV.UK ). So you can still:

• verify identity and carry out Right to Rent checks
• run AML, PEPs and sanctions and insolvency checks
• take up a former landlord reference
• check income against the rent, counting all reliable income
• ask for a guarantor, if you ask on the same basis for everyone [FACT-CHECK: confirm against GOV.UK discrimination guidance]

What you must not do

• Advertise "no DSS", "no benefits" or "working professionals only".
• Refuse a viewing or application because someone mentions Universal Credit.
• Leave benefit income out of an affordability calculation.
• Set a stricter test, such as a bigger deposit or extra rent, for people on benefits. Remember, rent in advance is now capped anyway ( GOV.UK ).
• Let your letting agent or referencing provider do any of the above. You can be held liable for people acting for you.

How to assess affordability fairly for someone on Universal Credit

1. Use one affordability test for everyone

Choose your test, for example a rent-to-income multiple, and write it down. Apply it to wages and benefits alike.

2. Ask for the right evidence

For Universal Credit, the claimant can download statements from their online UC account showing the payment amount and breakdown, including any housing element [FACT-CHECK: confirm current UC journal/statement features]. Other benefits usually come with an award letter. Ask for:

• recent benefit statements or award letters
• payslips if they also work
• recent bank statements showing the payments arriving

At mychecksai, tenants upload these documents securely and a person reviews them. We don't connect to bank accounts.

3. Add up all income

Combine wages, Universal Credit (including the housing element), Child Benefit, disability benefits and any other steady income, then compare the total with the rent using the same test as everyone else.

4. Check rent history

A previous landlord reference shows whether rent was paid on time. That's often a better guide than income source.

5. Consider a guarantor consistently

If an applicant doesn't meet your test, a guarantor may help. Offer this option on the same terms to everyone who falls short, not just people on benefits.

6. Record your decision

Note the test you used, the income you counted and why you decided as you did. This protects you if a council asks questions.

Why landlords are worried, and why a clear process helps

Goodlord's chief executive warned this month that tenants with non-traditional incomes are likely to "fare the worst" in a more cautious market ( Landlord Today, 23 October 2026 ). A consistent, documented, evidence-based check lets you be careful without breaking the law.

FAQs

Can a landlord refuse a tenant on Universal Credit?

Not because they get Universal Credit. You can decline someone who doesn't meet the same affordability test you apply to everyone, as long as benefit income was counted fairly.

When did the benefits discrimination ban start?

1 May 2026, for assured and regulated tenancies in England.

What is the fine for refusing tenants on benefits?

Up to £7,000 per breach, with further penalties for continuing or repeat breaches.

Can I still ask a tenant on benefits for a guarantor?

Yes, if you ask on the same basis as for other applicants who don't meet your test.

Does my letting agent's or insurer's policy let me off?

No. Discriminatory terms in mortgages and superior leases are cancelled, and terms in insurance agreed or renewed from 1 May 2026 are cancelled too.

Does mychecksai reference tenants on benefits?

Yes. We review benefit statements, award letters, payslips and bank statements alongside the other checks, and you make the decision.

Reference any applicant fairly for £29

mychecksai gives you ID and Right to Rent evidence, AML and insolvency screening, employer and former landlord references, and reviewed income evidence, whether that income comes from work, benefits or both, in one emailed report. It costs £29 including VAT per person, with no account needed. See pricing or read our guide for landlords .

Sources

• GOV.UK, Rental discrimination: a guide for landlords: https://www.gov.uk/rental-discrimination-landlords
• GOV.UK, If someone who gets benefits wants to rent your property: https://www.gov.uk/rental-discrimination-landlords/if-someone-who-gets-benefits-wants-to-rent-your-property
• GOV.UK, Rental discrimination under the Renters' Rights Act 2025: https://www.gov.uk/government/publications/rental-discrimination-under-the-renters-rights-act-2025/rental-discrimination-under-the-renters-rights-act-2025
• Renters' Rights Act 2025, section 40 (financial penalties): https://www.legislation.gov.uk/ukpga/2025/26/section/40
• GOV.UK, Rent in advance and deposits: https://www.gov.uk/assured-tenancy-agreements-a-guide-for-landlords/rent-in-advance-and-deposits
• Landlord Today (23 October 2026): https://www.landlordtoday.co.uk/breaking-news/2026/10/one-in-four-landlords-reject-tenants-they-would-previously-accept/