If you’re looking to rent a home, you might have come across phrases like “no DSS” or “DSS welcome”. But what does DSS mean? And why do landlords and agents mention it at all?
We’re going to explore these questions. And we’ll also look at why including statements like “No DSS” in property ads can put landlords on the wrong side of the law.
What does DSS mean?
Let’s start by clarifying the DSS meaning. Those three letters stand for the Department of Social Security. And if that doesn’t sound familiar, it’s because it’s a government department that hasn’t existed since 2001. (These days, it’s the Department for Work and Pensions.)
So why are people still talking about it? It’s a term that’s still familiar to many people. And it’s used as a shorthand to refer to people who will use state benefits to pay part or all of their rent.
What is a DSS tenant?
So while the DSS meaning refers back to the old name for a government department, it really focuses on the tenant. And more particularly, it’s defining them by how they pay their rent.
An advertisement that states “No DSS” is saying that the landlord won’t accept tenants who receive benefits. The benefits in question are usually universal credit, housing benefits, disability benefits or tax credits.
For some landlords, it seems, so-called “DSS income” is the wrong kind of money.
What does “DSS welcome” mean?
An advert that states “DSS welcome”, on the other hand, is making clear that receipt of benefits isn’t a bar to a tenancy.
Not all landlords or letting agents are prepared to be explicit about their approach to people receiving benefits. But that doesn’t mean that it won’t influence their decision-making process.
Including “DSS welcome” in adverts can make it clear there’s no secret agenda. And that may give people receiving benefits more confidence to enquire about the property.
What is DSS discrimination?
Housing charities like Shelter are scathing about the impact of “No DSS” policies from landlords and letting agents. They point out the unfairness of discriminating against people based on the way they pay their rent.
And they note that it’s usually those most in need of affordable housing who fall foul of such approaches.
People who think they’ve been the victim of DSS discrimination can check out the Shelter website. It includes template letters to make a formal complaint. And it explains how to complain to the Property Ombudsman if they’re unhappy with the response.
Why do landlords not accept DSS?
But is it really prejudice against people receiving benefits that make landlords reluctant to have them as tenants? Or are there more practical considerations?
Some landlords say that they can’t get insurance if they let their property to tenants who receive benefits. This was certainly a common problem in the past. These days, though, most insurers don’t have blanket exclusions of this kind.
Landlords can also take out rent guarantee insurance. This offers protection if tenants don’t pay their rent for any reason. But premiums are typically higher for renters who receive benefits and students, both of whom are seen as higher risk.
Are mortgage providers stopping landlords from accepting DSS tenants?
In the past, it was common for mortgage companies to restrict landlords from letting mortgaged properties to people receiving benefits.
But in recent years, those policies have come under increasing scrutiny. In 2019, Natwest announced that it would be removing such restrictions from its mortgage conditions. They were swiftly followed by The Cooperative Bank, a partner of the homelessness charity Centrepoint.
Today, the National Residential Landlords Association says that most new buy-to-let mortgage products don’t exclude renting to tenants receiving benefits. And property magazine Property Reporter found no evidence of higher levels of mortgage defaulting amongst landlords with tenants receiving benefits.
Can people on benefits pay their rent?
One practical issue facing people receiving universal credit is that the first payment is made five weeks in arrears. Rent, on the other hand, usually has to be paid a month in advance.
Some renters have found that providing landlords with two months’ rent in advance is an effective way to deal with concerns about affordability. That will cover the period before they receive their first universal credit payment.
Are landlords that ban DSS tenants breaking the law?
Several legal cases have been brought against landlords or agents imposing blanket bans on people receiving benefits.
People receiving benefits are more likely to be disabled and female. And both disability and sex are protected from discrimination under the Equality Act 2010. The plaintiffs in these cases argued that “no DSS” policies, therefore, constituted indirect discrimination.
The courts have consistently agreed, finding blanket bans unlawful and awarding damages to those who’d been discriminated against. The main cases were:
- Jane, a single mother of two children. Letting agents refused to consider her application for a property because she received benefits. This was in spite of her having an excellent record of paying her rent on time. The court found that the letting agent’s approach amounted to indirect discrimination on the grounds of Jane’s sex and disability.
- Stephen Tyler, a disabled man, whose requests to view properties were denied by an estate agent because he received benefits. The estate agent was again found to have acted unlawfully by indirectly discriminating against him on the basis of his disability.
- Hayley Pearce, who was told by a letting agent that a tenant receiving benefits “would not be acceptable to the landlord”. Hayley was found to have been indirectly discriminated against on the basis of her sex.
The decision on to whom to rent a property still rests with the landlord. But it’s important for landlords to look at each case on its own merits. As the examples above show, blanket refusals to consider people receiving benefits will be highly vulnerable to legal challenges.
Can properties be advertised as “no DSS”?
We’ve already seen the risks of policies saying “no DSS”, meaning agents or landlords who do this could find themselves in hot water.
The two largest property websites, Rightmove and Zoopla, have both banned the use of the phrase “No DSS” in listings. SpareRoom later followed suit.
Rightmove does, however, offer a get-out clause for landlords. It says that they can include in the property description any restriction that prevents them from accepting benefit recipients. Its guidance to advertisers includes as an example “a restriction in the landlord’s mortgage term”.
The website OpenRent, however, has taken a different approach. They allow landlords to list their property as “Accept DSS Income”. This, they argue, prevents people wasting their time applying for properties where a secret “no DSS” policy is in place.
It’s a less-than-convincing defence, given that any such policy — secret or not — is likely to be unlawful. And by asking landlords to highlight if they’ll accept tenants receiving benefits, the implication is clear. If that wording isn’t in the advert, tenants on benefits aren’t welcome.
Recap: DSS meaning
So what is the meaning of DSS? While the term refers to the long-gone Department of Social Security, it’s really about people who receive benefits. And it specifically means benefits used to pay rent — universal credit, housing benefits, tax credits and disability benefits.
More and more insurers and mortgage providers are removing conditions that prevent landlords from renting to tenants receiving benefits. And courts have repeatedly found that blanket “no DSS” policies are unlawful.
Renting to people on benefits may carry some extra costs. If you’re a landlord who wants to take out rental income insurance, for example, you’ll probably find premiums are higher.
But the key for landlords is to consider every prospective tenant on their own merits. Whether they receive benefits won’t tell you whether or not they’ll be a good tenant. Evidence they can afford the rent, and good references, will be a far more reliable guide.