Discretionary Housing Payment (DHP) Policy 2024/2025

In this policy:

Introduction

1.1 DHPs can provide further financial support for claimants of Housing Benefit (HB) or Housing costs element of Universal Credit (UC), if the Council is satisfied that further financial assistance is required to meet their housing costs.

1.2 The Department for Work and Pensions (DWP) makes annual grants available to local authorities for DHP purposes. Reading Borough Council’s allocation for financial year 2024/2025 is £367,440.

1.3 The DHP scheme is totally separate to UC, HB, and Council Tax Support (CTS). Reading Borough Council has a separate Discretionary Council Tax Support Payment (DCTSP) scheme for assistance towards Council Tax liability.

1.4 The Council considers how to allocate this limited budget in a way that is not only fair, consistent, and reasonable, but also supports those the Council considers to be in most need of assistance.

1.5 Where the DHP budget is exhausted prior to the end of the financial year, it will not be possible to award any further payments under this policy even where an applicant meets the qualifying criteria.

Policy

2.1 This policy sets out how DHP applications are decided, and the factors the Council considers when deciding whether to grant or refuse an application, it also has the application, it also has the flexibility to allow unusual cases. All Local Authorities must act fairly, reasonably, and consistently in their decision making with each application decided on its own merits.

2.2 There is an expectation that all applicants will take actions to improve their situation due to the limited DHP budget, this includes but is not limited to prioritising payment of housing costs, maximising income, reducing household costs, and fully engaging with any support being offered.

2.3 To manage the DHP budget as effectively, conditions can be applied to DHP awards. These make sure applicants know how to improve their situation and the steps to take to reduce their need for a further DHPs. Where conditions have not been met and no reasonable explanation has been provided, a further award may not be made.

Statement of objectives

3.1 The Council’s DHP Policy has the following key objectives:

Tenancy sustainment and homelessness prevention.
Help applicants with a disability or relevant medical need in their household that require additional financial support due to pay their rent.
Help applicants affected by welfare reform changes to pay their rent while a longer-term solution is found.
Help young people leaving Local Authority care to pay their rent.
Help the ex-homeless settle in the community to pay their rent.
To help applicants through personal crisis or difficult circumstances who are facing severe financial hardship to pay their rent.

Criteria for an award

4.1 Before a DHP can be considered, the applicant must:

Be receiving HB or have been paid the Housing costs element of UC.
Submit a fully completed DHP application form.
Have an eligible shortfall between the amount of HB or Housing costs element of UC and their housing costs, for example:
- Welfare reform changes, including the benefit cap and removal of spare room subsidy (bedroom tax).
- Unavoidable rent liability on two homes that cannot be paid by HB or UC.
- The two-child limit when calculating benefits.
- Income tapers where entitlement has been reduced by income.
- Reduction of UC for former HB claimants who were previously in receipt of the Severe Disability Premium.
Demonstrate they need additional financial assistance to meet their housing costs and provide any additional information (including medical evidence) to support their application within the timescale given.
Explain what other options they have considered to try and meet the shortfall in their housing costs, such as:
- Receiving debt advice.
- Reducing non-essential expenditure.
- Ensuring all eligible welfare benefits have been claimed.
- Increasing their hours of work.
- Receiving a contribution from other adults living in the property.
- Renegotiating their rent with their landlord.
- Moving to cheaper suitable alternative accommodation.
- Taking in a lodger.

What DHPs cannot cover

5.1 A DHP cannot be awarded to cover:

charges that are not eligible for HB/Housing costs element of UC.
Housing costs that HB or UC have already paid.
Increases in rent due to outstanding rent arrears.
Shortfalls caused by sanctions and/or reductions in benefits.
Shortfalls caused by HB overpayment recovery.
Shortfalls caused by overpayment recovery from UC.

5.2 A DHP cannot be awarded when:

There is an outstanding assessment of HB or Housing costs element of UC.
Entitlement to HB or Housing costs element of UC is suspended.

Priority groups

6.1 Priority groups have been established to ensure that awards support the key objectives of the scheme and protect the most vulnerable applicants with exceptional circumstances.

6.2 Priority Groups are defined as households where:

Welfare reform changes of the benefit cap, removal of the spare room subsidy (bedroom tax), Local Housing Allowance (LHA) reforms are causing severe financial hardship.
There is a disability or health condition and requires access to local medical services, local support networks or informal care that would not be available elsewhere.
A vulnerable person who has lived in the area for a long time and it is accepted to be unreasonable to establish support networks in a new area.
Their property is substantially adapted to meet the needs of severe disability.

Conditionality

7.1 Conditions will be placed on awards when considered reasonable. These are actions that the applicant can take to improve their situation and reduce their reliance on DHPs. They are not a punitive measure.

7.2 Examples of types of conditionality include:

Attending work related coaching with one of the Council’s partners.
Actively looking for work, with or without the support of the Council, or one of the Council’s partners.
Receiving and acting on debt advice to increase income, reduce outgoings and prioritising debts from an organisation that is qualified to provide such advice.
Working with the Housing Advice Team to explore alternative housing options.
Applying to be on the housing register, and bidding for suitable available properties in each cycle based on housing need.
Actively using HomeSwapper to look for mutual exchanges.
Paying any remaining shortfall between a rent charge and help with housing costs being received.
Maintaining payment arrangements or Court Orders for rent arrears.
Receiving, acting, and working with advice from specialist support services.

7.3 When making a repeat application, the applicant must be able to show how they have met the conditions applied to their previous award, and any steps they have taken to improve their situation.

7.4 Where conditions have not been met a further award may not be made unless a reasonable explanation is provided covering the period of the previous award.

Applying for a DHP

8.1 The regulations require an application is made before a local authority can consider making an award.

8.2 An application can be made by the person claiming HB or the Housing costs element of UC or someone acting on behalf of them where it appears reasonable in the circumstances. We will require written authorisation from the applicant to discuss their application with anyone acting on their behalf.

8.3 In all cases an applicant or their representative must fully complete a DHP application, including income and expenditure, and an explanation of the situation.

8.4 An application for can be made by:

Online application at www.reading.gov.uk/discretionary-payments
Paper application that can be requested by contacting Debt Advice Team on 0118 937 2197.
Support can be provided to make an application from the Debt Advice Team if an online or paper application cannot be completed.

When an application needs to be made

9.1 An application can only be considered when HB or the Housing costs element of UC has been paid to the DHP applicant or their partner.

9.2 Applications should be made as soon as the need arises, the start date of a DHP award will normally be the Monday following the application being received.

9.3 Backdating a DHP is allowed in the regulations for periods when HB or Housing costs element of UC were in payment. If requesting a backdate for more than one month the applicant will need to demonstrate a continuous good cause and exceptional circumstances as to why the DHP was not applied for at the time of the need.

9.4 The maximum award of DHP cannot exceed the eligible rent when combined with the Housing benefit or Housing costs element of UC to prevent a duplication of payments towards housing costs.

9.5 A DHP award will end if the applicant migrates from HB to UC. If continuing help is needed, a new DHP application will be required from the date UC was claimed.

Assessment of applications

10.1 We aim to make decision within 10 working days or as soon as practical of receiving the DHP application, along with any supporting evidence requested.

10.2 Each DHP application will be considered on an individual basis. All decisions will be notified in writing by letter or email and explain how to request a review if the applicant is dissatisfied.

10.3 When deciding whether to award a DHP, we will consider the following:

The information provided on the application to explain circumstances, and how the key objectives of this policy apply.
The size of the shortfall between the rent and HB or Housing costs element of UC, and the reasons for it.
The length of DHP award considered necessary.
The financial impact of any special requirements, health, or social problems the applicant or their family have.
What impact not awarding a DHP is likely to have on the Council’s services (including homelessness).
The extent to which the applicant is at risk of being made homeless.
The extent that financial assistance can help overcome the applicant’s difficulties.
Actions taken by the applicant to improve their situation prior to making the application.
The extent to which the applicant has met previous conditions or reasons it has not been possible to complete those actions.
The impact of any actions that the applicant and/or partner have taken which contribute towards the difficulties they are facing.

10.4 When assessing an application, we will take the total the household income, and subtract the household expenses listed on the application. Where high expenditure is listed with no reasonable explanation, we will use spending figures based on national averages to work out the extent of financial hardship.

10.5 Details of any capital held by the applicant and or partner will be considered, where capital in excess of £6,000 is held for people of working age, or £10,000 for those of pensionable age an award will not be made unless there are exceptional circumstances.

10.6 When calculating the total household income any Attendance Allowance (AA), Disability Living Allowance (DLA), Personal Independence Payment (PIP) or Armed Forces Compensation Scheme (AFCS) will be disregarded or offset against specific costs associated with ill health or disability. This will be considered on a case by case basis.

10.7 We will consider the amount of the eligible shortfall and the potential difference an award would make before deciding to make an award.

10.8 Applicants at risk of homelessness will be expected to work with the Housing Advice Team to explore their options in addition to applying for a DHP to prevent eviction. The housing options identified will be considered when deciding the application.

10.9 We will consider unavoidable or high costs that the applicant may have, such as fares for travel to work or special dietary requirements when assessing outgoings. Where necessary a further explanation or evidence of expenditure may be required.

10.10 The assessment process may require an interview with a member of Reading Borough Council’s Debt Advice Team, where the circumstances of each individual case and further information can be considered before a decision is made.

10.11 The length of a DHP award will be decided at our discretion on a case-by-case basis.

10.12 Shorter term awards are generally made where the applicant can take actions to improve their situation, conditions have been applied or a change in circumstances is expected.

10.13 Longer term awards up to the end of the financial year can be made when it is not reasonable for the applicant to take actions to improve their situation, and there is unlikely to be a change in circumstances and a short-term award is likely to cause undue distress.

10.14 A new application will be required for a further award to be considered after an award ends, this will be considered afresh and not automatically rewarded.

10.15 We will ask for any further information and evidence to decide an application. Failure to supply information within a month of the request may result in the application being turned down.

10.16 A decision to refuse an application due to requested information not being provided can be reviewed if the missing information is supplied within one month of the decision with a request for the decision to be reviewed.

10.17 We will signpost an applicant to other Council departments such as Housing Advice or Social Services or to external agencies if it is considered this would help.

Payment of DHPs

11.1 DHPs can be paid in a lump sum or a series of payments, for or the same frequency as HB or UC at the discretion of the Council.

11.2 DHPs will usually be paid to the same person/organisation that is being paid the HB/Housing costs element of UC. However, payments can be made to a third party (such as a landlord) at the discretion of the Council when considered reasonable to do so. For Council tenants, the DHP award will be credited directly to the rent account.

Benefit Cap

12.1 The benefit cap is a limit on the total amount of welfare benefits that can be received. This means HB or UC could be reduced to the benefit cap limit.

12.2 DHPs can be used to support applicants who are in financial need with challenges that prevent them from immediately dealing with the benefit cap by:

Moving into employment.
Finding more affordable accommodation.
Claiming an exempting benefit.

12.3 Due to the limited DHP budget, conditions are usually placed on this type of award to ensure that actions are taken towards a long-term solution. Priority will be given to benefit capped claimants who are likely to be particularly affected by the benefit cap, for example:

Those in temporary accommodation.
Individuals or families fleeing domestic abuse.
Those with kinship care responsibilities.
Individuals or families who cannot move immediately for reasons of health, education, or child protection.
Households moving to or having difficulty finding more appropriate accommodation.
Households with a young child, specifically a child aged 9 months and under, or a child aged under 2 years of age where childcare is a barrier to getting work.

Removal of the spare room subsidy (bedroom tax)

13.1 People living in social rented accommodation will have their HB or UC ‘eligible rent’ reduced if they are under-occupying their property. This is determined by the Local Housing Allowance (LHA) size criteria. There is a 14% reduction for one spare bedroom, and 25% for two or more spare bedrooms.

13.2 HB and UC claimants affected by the reduction are expected to explore ways of making up the shortfall themselves. This can include:

Increasing income.
Reducing outgoings.
Getting a lodger.
Moving to smaller accommodation.

13.3 Due to the limited budget, priority will be given to DHP applicants who are likely to be particularly affected by the under-occupation reduction, for example:

Where accommodation has been substantially adapted to meet the needs of a disabled person.
Where an additional bedroom is required on medical grounds for a disabled member of their household and an additional bedroom is not allowed for HB or UC purposes.
Where someone in the household is expecting a baby within 6 months, resulting in the need for larger accommodation.
Families with a child temporarily in care who is expected to return home.
People going through the adoption process where an additional bedroom is required but not allowed for HB or UC purposes.
People going through the foster carers approval process who need to show that they have a spare room to be approved.

Local House Allowance (LHA)

14.1 LHA rates restrict the amount of HB or housing costs element of UC that can be paid to private tenants.

14.2 HB and UC claimants affected by LHA restrictions are expected to explore ways of making up the shortfall themselves. This can include:

Increasing income.
Reducing outgoings.
Moving to smaller accommodation.

14.3 Due to the limited budget, priority will be given to DHP applicants who are likely to be particularly affected by the LHA reforms, for example:

Care leavers who need additional support to deal with the restrictions following their 22nd birthday.
Applicants who are six months away from their 35th birthday who are affected by the shared room rate.
Circumstances where a person’s move away from an area could risk their employment.
Where someone in the household is expecting a baby within 6 months, resulting in the need for larger accommodation.
Families with a child temporarily in care who is expected to return home.
Where it is not reasonable for the claimant or a member of the household to move on medical or disability grounds to alternative accommodation.
Where it is considered that the applicant is experiencing exceptional circumstances.
Applicants going through the adoption process where an additional bedroom is required but not allowed for HB or UC purposes.
Applicants going through the foster carers approval process who need to show that they have a spare room to be approved.

Rent in advance, deposits and removal costs

15.1 Due to the limited, priority will be given to applicants who are moving to more affordable accommodation where no other funding is available.

15.2 When considering applications for rent in advance, deposits or removal costs the following criteria must be met:

The property is affordable.
There is a valid reason to move.
The deposit, removal costs or rent in advance are reasonable.

15.3 The availability of any deposit or rent in advance owed to the applicant from a previous property will also be considered. We will also take in account if the applicant has been paid a DHP for rent in advance, removal costs or deposit in the past.

15.4 Rent in advance and deposits will normally be paid to the landlord.

15.5 Where removal costs have been applied for, three written estimates need to be provided by the applicant before a decision can be made. This is so that we can consider if the cost is reasonable.

15.6 Where the applicant’s current accommodation is unaffordable or there is a risk of homelessness, we will decide if it would be more cost effective to provide financial assistance to help them move to more affordable accommodation, instead of providing financial assistance to cover any shortfall in rent or reduce rent arrears.

When we will stop paying DHPs

16.1 We will stop paying DHPs if:

It is deemed the applicant no longer requires DHPs following an in-year change in their circumstances.
DHP’s were paid due to an official error.
The applicant has misrepresented their circumstances or failed to disclose a relevant material fact
Entitlement to HB or the housing costs element of UC ends.

Overpaid DHPs

17.1 The applicant has a duty to promptly notify the Benefits Team and DWP of all relevant changes in their circumstances (including any changes to income and household).

17.2 The Council may revise a DHP award upwards or downwards if the applicant’s circumstances change.

17.3 The Council will make every effort to minimise overpayments. These will be recovered if it is decided that:

An award was made as a result of a misrepresentation or failure to disclose a material fact (either fraudulently or otherwise), or
An error made when the application was decided.

17.4 Where it is decided to recover a DHP overpayment, a written explanation of how the overpayment occurred, the periods and amounts to which it relates will be sent plus details on the disputes process.

17.5 DHP overpayments can be recovered by:

Offsetting the overpayment against future DHP awards.
Sending an invoice
Setting up a reasonable repayment plan.
Using a HB underpayment to recover some or all of the DHP overpayment with the applicant’s consent.
In extreme circumstances recovery action can be taken though the County Court.

17.6 Where the applicant disagrees with a decision to recover an overpayment, they will need to follow the DHP dispute progress.

DHP dispute process

18.1 DHP’s are not payments of HB or UC and are not subject to a statutory appeals process.

18.2 Where an applicant is dissatisfied with a decision, they must write or email the Debt Advice Team within one month of the date of notification and request a stage one review of the decision. The request must state why they disagree with the decision made and, if necessary, provide supporting evidence.

18.3 Where it is apparent that the original decision was made in ignorance of a material fact, either because that information was not available at the time the decision was made or because the information was overlooked, then the decision will be revised accordingly.

18.4 A different officer will consider the request, along with any new evidence or information within a month.

18.5 If required, further information will be requested before a decision is made. Where additional information or evidence is not provided within a month, the review will be made based solely on the information held.

18.6 Once reviewed a letter or email will be sent advising whether the original decision has been revised or why it was unsuccessful and how to request a stage two review if still dissatisfied.

18.7 If the applicant is dissatisfied with the outcome of the stage one review, they must write to the Debt Advice Team within one month of the stage one decision notification to request a stage two review. The letter must state why they still disagree with the decision made and, if necessary, provide supporting evidence.

18.8 An internal DHP review panel will be formed of Council representatives to consider the stage two review request and any new evidence or information and make a final decision within one month.

18.9 Once the DHP review panel has considered the stage two review, a letter will be sent advising whether the decision has been revised or the grounds that the review was unsuccessful.

18.10The DHP review panel decision will be final and may only be challenged by a complaint to the Local Government Ombudsman if there is an allegation of maladministration.

Policy review

19.1 The DHP policy will be reviewed annually by the Debt Advice and Financial Inclusion Manager, or in response to any legislative changes, welfare reform or other factors that impact on its effectiveness.

Publicity

20.1 The Debt Advice Team will publicise the scheme and will work with all interested stakeholders to raise awareness.

20.2 This policy will be available at www.reading.gov.uk/discretionary-payments

Fraud prevention

21.1 The Council is committed to the prevention and tackling of fraud. Where fraud or potential fraud is suspected the matter will be investigated.

21.2 Fraudulent applications for DHP’s may lead to a criminal prosecution under the Fraud Act 2006.

Governing legislation

22.1 The Council must act in accordance with the relevant legislation including:

Discretionary Financial Assistance Regulations 2001
The Housing Benefit Regulations 2006
The Universal Credit Regulations 2013

22.2 In addition we consider the Department for Work and Pensions Discretionary Housing Payments Guidance Manual.

Contact

23.1 Reading Borough Council, Debt Advice Team, Civic Offices, Bridge Street, Reading RG1 2LU

Debt Advice Team: 0118 937 2197 Mon, Tues, Thurs, Fri 9am-5pm, Weds 10am-5pm
Email: debt.advice@reading.gov.uk
Customer Fulfilment Centre: 0118 937 3727 Mon to Fri 9am-5pm
Online: www.reading.gov.uk/discretionary-payments and www.reading.gov.uk/debtadvice

Last updated on 01/04/2024

Discretionary Housing Payment (DHP) Policy 2024/2025