Discretionary housing payments policy

Discretionary housing payments (DHPs) were introduced in July 2001 and are used by local authorities to provide financial assistance to claimants in receipt of housing benefit, or the housing costs element of Universal Credit, when the LA considers that additional help with housing costs is required.

The housing cost that help is needed with will most often be a shortfall between a DHP applicant’s benefit entitlement and their rental liability, but is not limited to this as the concept of housing costs is broader in scope than the periodic rental liability to which housing benefit and Universal Credit housing costs are limited.

DHPs may be awarded as a one-off payment or periodically for a period the LA considers appropriate.

Since 1st April 2013, the abolition of council tax benefit has meant that DHPs can no longer be considered in respect of council tax liability.

The essence of the DHP scheme is that there is no statutory right to a payment. Whether to grant a DHP and, if so, for what amount, is always at the council’s discretion. In exercising its discretion, the council considers each application on its own merits while having due regard to the overarching objectives of its DHP policy taken together with its public law duties to act lawfully, reasonably, and fairly.

DHPs can help to mitigate any shortfall in benefit caused by the welfare reform changes that have been introduced since April 2012, and in respect of which the Department for Work & Pensions has provided extra DHP funding, namely:

  • the benefit cap
  • the social sector size criteria
  • local housing allowance reforms.

While the council expects that a high proportion of DHP demand will be driven by recent measures to reduce housing benefit expenditure, it will still welcome applications from those who are not affected by one of the post-April 2012 measures but nonetheless find themselves in need of further help with housing costs.

DHP funding is insufficient to meet demand and it will not be possible for the council to grant DHP to every applicant, nor to meet the full shortfall in cases where payment is made.

The legal framework for DHPs is provided by the Discretionary Financial Assistance (DFA) Regulations 2001.

These regulations give councils broad discretion, but decisions must be made in accordance with the general framework of public law which applies to any decision made by a local authority. This includes both the long-standing administrative law principles of legality, rationality and fairness and more recent statutory duties created by the Human Rights Act 1998 and the Equality Act 2010, among others.

Costs that DHP can assist with

While DHPs exist to provide “further financial assistance […] to meet housing costs”, the DFA Regulations do not define what housing costs are. They only list some liabilities that are excluded from being housing costs, whilst otherwise leaving the term open to interpretation. The costs that DHP cannot meet include service charges that are ineligible for housing benefit or Universal Credit housing costs for example, water rates, meals, personal care, a reduction in housing benefit received because of overpayment clawback, and a need for help with housing costs that arises because of a benefit sanction.

While housing costs could be interpreted narrowly to mean only the portion of the periodic rental liability that is left unmet by housing benefit or Universal Credit, DWP’s DHP Guidance Manual suggests that housing costs can be interpreted more widely to include liabilities like:

  • rent in advance
  • deposits
  • other lump sum costs associated with a housing need such as removal costs.

Hammersmith & Fulham Council has adopted this broader interpretation and will consider one-off awards of DHP to help with these costs. Lump sums can also be considered for rent arrears, but the arrears must refer to a period when housing benefit or Universal Credit housing costs were in payment.

Rent deposits and rent in advance

We can consider awarding DHPs for a rent deposit or rent in advance schemes for a property that the customer is yet to move into if they are already entitled to housing benefit or Universal Credit housing costs for their present home.

For DHP awards for one-off housing costs like deposits or rent in advance, the weekly limit that applies to DHP for periodic rental liability has no effect as DHP here is being granted as a lump sum to meet an immediate housing need.

We will normally only consider payments in advance or deposits when supported by a council representative or when the claimant wants to move to more suitable accommodation.

The payment will always be made to the landlord when awards such as this are made.

NB:

  • As a lump sum payment for rent in advance is not made in respect of a period, we do not have to be satisfied that the customer is entitled to HB other than at the point we make the award.
  • We can still consider an award if the rent in advance is for a property outside of London Borough of Hammersmith and Fulham if the applicant is currently in receipt of HB in the borough.

Once a DHP has been made to the customer for rent in advance or a deposit and used for that purpose then there is no provision in DHP legislation for the council to ask for this money back once the tenancy ends.

The application process

There must be an application for a DHP but it does not need to be in writing nor does must it come from the benefit claimant. We will accept DHP requests from council departments on behalf of the applicant where they feel that a DHP is appropriate, although the final decision on whether to grant DHP always remains with the housing benefit section.

Any department in the council can take a DHP form from an applicant.

All unsupported applications should be on this form Discretionary housing payment form (pdf 82KB)

Deciding on a DHP

DHPs are a discretionary scheme. The council will consider each case on its own merits, while having regard to the general principles stated later in this policy. It is not possible to define exactly who will and will not be awarded a DHP as this is a question for the decision maker in every case. This policy provides a framework which decision makers should have regard to, but flexibility remains to grant or refuse a DHP outside the policy’s framework depending on the circumstances of each applicant.

DHP decisions do not carry a right of appeal to the First-tier Tribunal. An applicant who is unhappy with the outcome of their DHP application can request a review, and their case will then be considered by the manager responsible for DHPs.

Payment of DHP

Lump sum DHPs for a deposit or rent in advance will be made to the landlord. In the case of periodic DHPs to meet a rent shortfall for housing benefit claimants, DHP will be made alongside housing benefit. In the case of periodic DHP for Universal Credit claimants, the council will usually follow the Department for Work & Pensions’ decision with respect to whom to pay the housing costs. If housing costs are being paid to the claimant, DHP will be paid to the claimant on a fortnightly basis. If housing costs are being paid to the landlord, DHP will be paid to the landlord on a 4-weekly basis. In exceptional circumstances, the council will consider alternative weekly payment cycles or paying DHP to a different person than the one who receives the housing costs.

Objectives of making a DHP award

The overarching objective of Hammersmith & Fulham’s DHP scheme is to prevent homelessness by either helping applicants to remain in their existing accommodation or to secure a move to alternative accommodation where the tenancy can be sustained without needing DHP.

Within the overall objective, regard will also be had to:

  • The needs of Equality Act protected groups such as disabled people and families with children.
  • The importance of work as a mechanism for moving out of poverty and using DHP to encourage and facilitate work where practical.
  • The cost efficiency of granting a DHP compared to public expenditure that might be incurred in its absence.
  • The limited availability of DHP funding and the need to balance the interests of any one DHP applicant with other potential recipients.
  • Working with other council departments to ensure that mutual clients’ accommodation needs are met.
  • Looking favourably at foster carers, child protection cases, children with special needs and children who are at key points in their education.

This list is non-exhaustive and consideration will always be given to the representations made with each application.

Period and amount of DHP awards

In most cases, DHPs will be awarded as a short-term measure to allow an applicant time to address their housing situation by moving to more suitable accommodation, obtaining work, or otherwise bringing their financial situation under control.

In exceptional circumstances where an applicant cannot reasonably be expected to move elsewhere, most notably if they are living in specially adapted accommodation, longer term DHP awards will be considered, although they will be subject to at least annual review to ensure that the amount of DHP continues to be an appropriate match for the applicant’s circumstances. In general, the council would expect to award large weekly amounts of DHP only as a short term measure to avert an immediate risk of homelessness.

There are no fixed thresholds for when the council will consider a DHP to meet a shortfall, set a time limit in the case of a large award or impose an absolute upper limit on a periodic award. The council will examine factors, including but not limited to:

  • The household’s income and expenditure, and whether these could reasonably be increased or reduced;
  • Whether any non-dependants could be expected to pay more than the standard contribution;
  • Whether there are any circumstances that prevent the applicant from seeking alternative accommodation;
  • Whether the shortfall must be met in full, or either the applicant can reasonably be expected to make some of it up and or the shortfall is of a sufficiently low amount that it will not be in the landlord’s interests to seek possession.

The decision maker will consider the applicant’s finances, the personal needs of the applicant or other members of their family, the amount of the shortfall, and any special housing requirements and make a case by case judgement with respect to whether to grant DHP and, if so, for how much and over what period.

The council may refuse a DHP where it considers, given the need to help as many people as possible out of resticted funds, that the shortfall is unreasonably high, and that awarding a smaller amount would be unlikely materially to improve an applicant’s situation.

To provide a work incentive, benefit capped claimants will usually be asked to contribute £20 per week towards their rent, although this may be waived where its imposition would cause unreasonable hardship.

DHP and Universal Credit (UC)

Where a Universal Credit claimant has all their Universal Credit paid to them, there is no distinction between Universal Credit for housing costs and that for general expenditure: it is all paid as a single sum. In such a case, the council will consider a DHP applicant’s:

  • rent liability
  • household composition
  • expenditure
  • income from UC and other sources

and reach a judgement on whether the applicant needs DHP to make their rent liability.

If the Department for Work & Pensions makes managed payments of UC to the landlord, then there is clearly identifiable “assistance with housing costs” already being provided, so the council will allow for the value of any UC managed payment of rent when it decides whether a DHP is appropriate. It is established in case law that as DHP is “further assistance”, the value of any housing costs benefit that is already being paid must be deducted from any potential DHP award.

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