DHPs - is your LA spending all their allowance??
Statistics on English and Welsh Local Authorities’ use of their DHP allocations for 2018-19 shows that whilst some LAs spent more than the government contribution, the majority spent less, with nine LAs spending less than 50% of their allocation!
Why not check to see how much your LA spent? Click here and go to the data table and then click on the financial returns tab.
Want to know about Discretionary Housing Payments (DHP) – click here.
Why are so many LAs underspending?
With so many claimants suffering financially due to the welfare reforms, it seems surprising that any LA would fail to take advantage of their full allocation – any underspend is returned to central government and means that the LA gets less the following year.
Could it be a misunderstanding about who is eligible, or how much they can receive, or under what circumstances – especially for UC claimants?
Which UC claimants can get a DHP?
Universal Credit claimant can apply for a DHP if they have a Housing Cost Element included when their UC entitlement is assessed.
Any UC claimant who is liable for rent (or is being treated as liable) will have a Housing Costs Element included in the assessment – even if their UC award is then reduced due to income or deductions or the Benefit Cap etc.
So long as the claimant is liable for some rent / eligible service charges they know there will be a Housing Cost Element. In 2016 the DWP had to remind LAs of this in Housing Benefit Bulletin G8/2016.
This means that someone with only a small UC award – perhaps a claimant who pre-UC had Tax Credits but no HB, could be entitled to a DHP under UC where they wouldn’t have been under HB (so long as they can demonstrate the need for it).
How much DHP can a UC claimant get?
That depends on whether it is to help with one off costs such as a rent deposit, or to help with their on-going rental liability.
The amount of DHP a Universal Credit claimant can receive to help them with their on-going rental liability is limited to the full amount of Housing Cost Element included in their UC award - as it is shown on the UC award notification. This is their gross rent minus any housing costs contributions (non-dependant deductions), and for social housing tenants any ineligible service charges and bedroom tax reduction.
So where are LAs going wrong?
Some LAs have been wrongly refusing DHPs to claimants whose Housing Cost Element is the same as their gross rental liability – because there is no obvious shortfall.
This comes from having a ‘HB’ head on and not understanding that the Housing Cost Element just makes up the assessment - they can still be struggling to pay their rent even if there is no bedroom tax, ineligible service charge or non-dependant deduction. The UC award could have been reduced by the Benefit Cap for example.
Some LAs have been wrongly refusing DHPs to claimants who have an APA managed payment in place, ie where an amount of UC equal to the Housing Cost Element goes straight to the landlord.
But the claimant might still be struggling to pay their rent if the amount going to the landlord doesn’t cover the full rental liability.
Some LAS have been refusing DHPs to claimants whose full rental liability is met every month by the APA managed payment, but the claimant’s total award is reduced by the Benefit Cap. These cases are more complicated – see this page for explanations and standard letters.
What to do if your LA is an under-spender?
If they are refusing DHP applications from UC claimant in any of the above situations, then the claimant can ask for the decision to be looked at again – explaining why they believe they are entitled to claim / why they are in hardship. There is no appeal procedure as DHPs are discretionary.
You could try to arrange a meeting to discuss the particular difficulties your tenants / customers are facing and to discuss the best procedure for helping claimants obtain a DHP award.
If the LA appear to be taking a blanket approach to a claimant type or circumstance, they are ‘fettering their discretion’ and could ultimately have their behaviour scrutinised by the Local Government Ombudsman.