Discretionary Housing Payments
(DHPs)
Peter Meehan
HB Benefits Adviser
27th August 2014
pgmeehan@sky.com
Options for claimants with bedroom
tax shortfalls
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Make up shortfall from current income?
Take up paid employment?
Increase earnings to meet shortfall?
Downsize to smaller accommodation?
Apply for DHP?
Take in a Lodger?
Challenge decision to class a room as a bedroom?
Discretionary Housing Payments:
what legislation?
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The Discretionary Financial Assistance
Regulations 2001
The Discretionary Housing Payments
(Grants) Order 2001
Housing Benefit Regulations 2006,
Schedule 5- Sums to be disregarded in the
calculation of income other than earnings
Paragraph 62 – ‘Any discretionary housing payment
paid pursuant to regulation 2 (1) of the Discretionary
Financial Assistance Regulations 2001’
What is a DHP?
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Further assistance with rent over and above the
Housing Benefit which the claimant is receiving, in
each case up to the maximum eligible charge.
Can also be awarded to assist with the cost of
moving to or taking up a new tenancy (eg rent in
advance, a rent deposit and/or other lump sum costs
such as removal charges)
Not available from April 2013 to help with Council
Tax payments
DHP: the ground rules
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There must be a claim for DHP; if not a written claim then a
record should be kept of any verbal claim made either in person
or by telephone.
Claims can be made on behalf of a claimant by an appointee.
Claim can be for a backdated period where Housing Benefit
was in payment and there was a shortfall between HB and the
total eligible rent.
Claims must include grounds for the extra help and any
additional information the LA asks for which is pertinent to the
DHP claim.
Once a claim is made it can be reviewed to take account of
changes in circumstances or ongoing need
Covering HB shortfalls
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Shortfalls in eligible rent but not in respect of
ineligible service charges, rent arrears, reductions in
respect of sanctions and overpayment recovery
deductions.
Such shortfalls might be where a rent restriction has
been applied (eg RO has intimated a LRR/CRR
restriction, an LHA ceiling, a Shared Room Rate or
an under-occupation reduction).
Can also cover a shortfall resulting from a nondependant deduction or because earnings/income
above basic allowance rates has reduced HB
entitlement (ie a taper reduction).
Review, Termination and recovery of
DHP payments
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‘A relevant authority may review any decision it has made with
respect to the making, cancellation or recovery of discretionary
housing payments in such circumstances as it thinks fit’
Reg 8 (1) of The Discretionary Financial Assistance
Regulations 2001
Where the payments have been paid as a result of an error at
the time of the assessment.
Where a material fact (s) has not been disclosed or has been
misrepresented by the claimant
DHP cannot be recovered by deductions from ongoing HB,
CTR or other state benefits.
DWP preferred use of DHP
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To help secure and move to alternative accommodation (eg rent
deposit, rent in advance, removal costs)
To help with short term rental costs while claimant seeks to move
to alternative accommodation
To help with short term rental costs while the claimant actively
seeks and takes up employment
To help with on-going rental costs for disabled person in adapted
accommodation
To help with on-going rental costs for foster carer
To help with on-going rental costs for other reasons at the
discretion of the council
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2010/11 £20m
2011/12 £20m + £10m*
2012/13 £20m + £40m*
2013/14 £20m + £40m* + £30m** + £65m***
2014/15 £20m + £40m* + £60m** + £45m***
Local authority can add a further 1.5 times the total DWP allocation to
arrive at its own DHP budget for the year (eg if the annual DWP
allocation is £100,000 then the overall budget can be £250,000 if the
council so chooses but the extra money will come from the council’s
own funds).
Any unspent DWP funding at the end of the financial year must be
returned to DWP and cannot roll over to the following year.
* for LHA reductions
** for under-occupation in social sector reductions
*** for benefit cap reductions
Final DHP totals for Scotland 2013/14
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DWP Allocations
£16.26 million
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Revised Upper limit
£40.67 million
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Scottish Govt. funding c £20.00 million
DHP : Were Scottish councils on target to
spend up to their 2013/14 revised upper limit
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Scottish Government survey of DHP
expenditure up to 31st February 2014
showed that an average of only 62% had
been spent or committed.
Why?
Mid-year changes to DHP for 2013/14
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Corrections to initial allocations for Scottish LAs because
of errors in distribution data.
Extra £5 million for UK councils with large rural areas
(£3.45 million of which went to 12 Scottish councils)
Scottish Government provided £20 million to meet gap
between revised allocation and spending limit.
DWP provided extra funding in the form of a DHP Reserve
Fund from which 14 Scottish LAs successfully bid for and
received a total of £2.80 million in addition to their revised
allocations. (NB. These 14 authorities were told that they
couldn’t top up their Reserve Funding allocation but….)
Amendment to legislation
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An amendment to the ‘Discretionary Housing
Payments (Grants) Order 2001’ will be made with
retroactive effect from April 2013, to clarify that the
overall 2.5 times expenditure limit will be based on
total central government contributions awarded for
the year in question, rather than the contribution
awarded at the start of the year.
Revision to 2013/14 limits
HB Circular S3/2014 published 24 March 2014
Estimates of the Annual Loss of HB resulting from RSRS
Estimated Annual Loss in Millions
46.9
45.8
45.2
43.6
43.2
42.2
June
July
August
September
Source: DWP Stat-Xplore. Monthly Losses x 12
October
November
2014/15: DHP Cap vs. RSRS estimate (1)
Millions
RSRS Impact
3.5
3
2.5
2
1.5
1
0.5
0
Source: DWP Stat-Xplore and
HB Circular S1/2014
2014/15 DHP Cap
West Lothian
West Dunbartonshire
South Lanarkshire
South Ayrshire
Renfrewshire
North Lanarkshire
North Ayrshire
Midlothian
Inverclyde
Glasgow City
Fife
Falkirk
Edinburgh, City of
East Renfrewshire
East Lothian
East Dunbartonshire
East Ayrshire
Dundee City
Clackmannanshire
Aberdeen City
Millions
2014/15: DHP RSRS
Cap
vs. RSRS
(2)
Impact
2014/15 DHPestimate
Cap
10
9
8
7
6
5
4
3
2
1
0
Looking ahead
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Impact of the bedroom tax looks to be reducing
in Scotland, down from an initial estimate of
£50million per annum.
As it stands, the overall DHP limits in Scotland
for 2014/15 allow full mitigation in 12 LAs
Ministers are seeking for the DHP overall limit to
be lifted.
DHP Funding in Scotland 2014/15
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DWP total
SG funding
Total funding
£15,230,343
£20,000,000
£35,230,343
Overall limit
£38,075,857
NB. Scottish Govt. has committed £35 million to
mitigate the impact of the bedroom tax but unless
DWP removes or increases the overall limit then it
cannot all be used to top up DHP.
Conclusions
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If the UK Government does not lift the cap on
DHP spending, then the Scottish Government
would “… put in place a scheme to make the
additional £15 million available to social
landlords so that we need not see any evictions
in Scotland this year as a result solely of the
bedroom tax”.
–
Cabinet Secretary for Finance and Sustainable Growth, John Swinney
MSP
Recent Development
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DWP ministers are prepared to remove the
overall DHP limit if Scottish Government
agree to such a change. Amendments to the
legislation to provide for such a change are
being drawn up but it may be autumn before
they are finally enacted. So what happens in
the meantime?