Just some background below for those interested, or please scroll down to the ** for the actual query.
At the beginning of 2024, a Romanian family moved into my rental property. They told me it would be the mother, father, two kids, and the father’s cousin (and his wife). All adults were in full time employment. The property was advertised strictly as families only.
On the third month of the tenancy, the alleged “cousin” and his wife left the property after some sort of falling out between them. The cousin phoned me to tell me that he had left the property, and that they were not actually cousins at all.
I spoke with the other two adults, and they said that they would like to remain at the property. I agreed as payments had been made on time up until then.
Over the course of the year, rental payments were always late, and they were always behind. I also found out that they were subletting two of the bedrooms without my consent.
I’ve issued a section 21 eviction notice, as their tenancy has ended. Since the notice, my tenants haven’t paid any rent at all- no surprise there. After pressuring them for the rent, they said they would apply to the council for help with their arrears. I figured out, since they were eligible for that, they must also be receiving UC. I made an application online to have the Housing benefit paid directly to myself, and it was accepted. The payment for arrears however, has been declined, and DWP refuse to comment on why.
It turns out my tenants stopped working shortly after moving into my property. They’ve been pocketing their housing benefit, subletting my house, and they’re receiving student loans. They’re not actually studying, it’s just to get the money. This seems to be a common ploy of getting extra cash in the Romanian community. I confronted them about their employment status, and they said they are working part time, but I find that highly doubtful at this point.
My tenants were notified by the council that their housing benefit would start being paid to myself directly. As expected, they called me up yelling and screaming, and threatening to cancel the DHP arrears arrangement that they have allegedly set up.
They initially threatened that if I don’t have the Housing Benefit payments directed back to them, they will cancel their DHP arrears payment request, and I will never recover the arrears. The story then changed, and they told me that the council will reject the DHP claim because their Housing Benefit is being paid directly to myself. They’re claiming that the council agreed to cover their arrears in full, and that it would be in my account in 5 days. The council won’t confirm this with me, and the tenants refuse to give the council consent to discuss this with me. I smell BS, obviously. They’ve given me strict instructions to call DWP on Monday, to put the Housing Benefit back on their names 
**My question is this- if as the landlord, I have requested that the Housing Benefit be paid directly to myself (due to failure on the tenants part for not paying me) can I still be eligible for receiving DHP for rental arrears? As explained above, my tenants are saying their DHP request would be rejected under these circumstances, but it’s impossible to trust anything they say. It’s the weekend, so I can’t ring the council until Monday, and I would really like to know how this actually works. If anyone has experience or knowledge, can you please shed some light on this?
Also, has anyone managed to actually recover any accumulated arrears via court action? How is this even possible for tenants that don’t work and are receiving benefits? Is it just a slap on the wrist and a CCJ on their records?
Any advice is much appreciated, thank you!