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Subjects

Discretionary Housing Payments (DHPs)

DEPARTMENT FOR WORK AND PENSIONS (March 2001)

Introduction

1. Discretionary Housing Payments are not payments of benefit. They are freestanding payments to be made at the discretion of the local authority, subject to an annual cash limit, in cases where the local authority considers that additional help with housing costs is needed.

2. This is not the same as the current requirements to look at exceptional hardship or exceptional circumstances. Each case should be considered on its own merits: whether there was a previous award, or refusal of award, of exceptional hardship or exceptional circumstances payments should not influence decision making.

Why the change?

3. Exceptional Hardship Payments (EHPs) and Exceptional Circumstances Payments (ECPs) are part of the HB and CTB schemes, although they are both subject to cash limits. This means that financial constraint is a factor in a local authority´s decision on any individual case. That would not be compatible with the introduction of the new appeal right to an independent tribunal, which could not be fettered by financial considerations. This is why EHPs and ECPs will cease to exist when the new appeals arrangements are introduced from July 2001.

The legislation

4. The Child Support, Pensions and Social Security Act 2000, which received Royal Assent on 28th July 2000, provides new arrangements to allow authorities to make additional discretionary housing payments (DHPs) to claimants in receipt of HB or CTB.

5. DHPs will not be payments of benefit. They will therefore be made in addition to HB or CTB and will not form part of it. The regulations covering DHPs are The Discretionary Financial Assistance Regulations 2001 (referred to in this guidance as "the regulations"). The regulations provide some basic requirements but give authorities discretion in most areas (eg. claims and payments process, information requirements and recovery).

6. For DHPs, each authority´s cash limit and central government contribution will be set out in annual finance Orders. As EHPs and ECPs will continue to exist for the first three months of the 2001/02 financial year, there will also be Orders covering their Permitted Totals and the central government contribution for EHPs.

Key features of DHPs

7. These new arrangements are broader in scope than the ECP and EHP schemes. Under the new arrangements authorities will, subject to certain conditions, be able to make provision for any claimant whose HB/CTB isrestricted and is, in the view of the local authority, in need of additional help with housing costs. There are no prescribed tests of either exceptional hardship or exceptional circumstances - authorities simply have to be satisfied that the person concerned is in need of further financial assistance for housing costs.

8. The key features of DHPs are set out at Annex A.

Considering a DHP

9. The following criteria must be satisfied:

The claimant is entitled to HB or CTB, or both.
You are satisfied that the claimant requires further help with housing costs.

10. You should also note that you cannot award any further DHPs if you have exceeded your authority´s overall cash limit. A "quick reference" flow chart is set out at Annex B.

What is meant by "housing costs"?

11. We mean council tax liability and eligible rent. The following are not included, and DHPs should not be made in respect of them:

(a) Certain elements of the rent

Ineligible service charges: these are specified in Schedule 1 to the Housing Benefit (General) Regulations 1987 ("the HB regs")
Charges for water, sewerage, and environmental services - as defined and calculated under the Housing Benefit provisions
Increases in rent due to outstanding rent arrears : Regulation 8(2A) of the HB regs refers

Example 1: Mr Jackson´s rent is £75 per week. £10 of this is an ineligible service charge. His Housing Benefit is £65 per week, ie. his rent is only reduced by the ineligible service charge. In this case, as the only shortfall arises as a consequence of ineligible service charges, no DHP can be made.

Example 2: Ms Fleming´s rent is £85 per week and of this, £5 is an ineligible service charge. Her rent for HB purposes is further reduced under Reg 11 so her HB entitlement is £65 per week. In this case you should assume that £70 of her rent is being met by benefit and whether she requires help with the balance.

(b) Alternative maximum council tax benefit("second adult rebate")

Liability to meet council tax where second adult rebate is payable. This is to ensure that DHPs are not made in cases where a person is not entitled to CTB in their own right, but is getting a second adult rebate. In such cases DHPs cannot meet any shortfall between the second adult rebate and the council tax liability.

Example: Mrs Turner lives with her son who is on Income Support. She is not entitled to CTB in her own right, but she gets a full second adult rebate (25% of the council tax liability) for her son. She would not be able to get a DHP for help towards the remainder of the council tax.

Any reduction in Income Support or income-based Jobseeker´s Allowance (JSA) due to a Reduced Benefit Direction (RBD) for failure to comply with the Child Support Agency in arranging maintenance. The RBD is a reduction in benefit of 40% of the personal allowance and only applies to Income Support or income-based JSA.
Any reduction in benefit as a result of non-attendance at a work-focussed interview. In other words, a ONE sanction. This applies both where the person´s HB/CTB is reduced and where any other benefit that the person is receiving, such as Income Support is subject to a sanction.
Example 1:
Miss Waterson´s rent is £80 per week. A restriction of £15 per week under Reg 11 makes her original HB entitlement £65 per week. She fails to attend a work-focussed trigger interview at a ONE office and her HB is sanctioned by £10 per week, she then applies for a DHP. In considering whether there is a need for further financial assistance, you should assume that the sanction has not been applied.
Example 2:
Mrs Sweeney is receiving Income Support and HB. Her HB is subject to a non-dependant deduction. She applied for a DHP but was not successful as she was not considered in need of further financial assistance. A few weeks later, her Income Support was sanctioned by £10 for non-attendance at a work-focussed trigger interview. Because she felt that she was now short of money, she applied again for a DHP. In a case such as this you assume that the sanction has not been applied when considering the need for further financial assistance.
Any reduction or loss of benefit due to a JSA employment sanction - JSA is not payable for the period of sanction if they have contributed towards their unemployed status, for example by leaving employment voluntarily or failing to attend a prescribed training scheme. In such cases, it may be possible for a reduced rate of JSA to be paid under the JSA hardship provisions.
Any reduction in benefit due to a JSA sanction for 16/17 year olds - for certain young people who receive JSA under a Severe Hardship Direction - JSA is not payable for the period of the sanction if they have contributed towards their unemployed status, for example, by leaving unemployment voluntarily or failing to attend a prescribed training scheme.

(d) Suspensions

Any amount of benefit suspended both in relation to HB/CTB and any other benefit

Benefit can be suspended either because there is a general doubt about entitlement or because a claimant has failed to supply information pertinent to their claim. In such cases, it would not be appropriate to pay DHPs instead. One of the intentions of the suspension provisions is to act as a lever to ensure that the claimant takes the necessary steps to provide the authority with the necessary information/evidence - paying DHPs could reduce the effectiveness of this lever.

(e) Where a person is entitled to HB, but not CTB (and vice-versa)

Where the person is entitled to HB, but not CTB, the liability to make council tax payments In other words, where a person is only getting HB, you should not take into account any financial assistance that he may require with his council tax, when considering the award of a DHP.
Where the person is entitled to CTB but not HB, the liability to make rent payments In other words, where a person is only getting CTB, you should not take into account any financial assistance that he may require with his rent, when considering the award of a DHP.

Example: Mr Hanson is getting CTB, but is not entitled to HB. His council tax is met in full but he considers that he needs further financial assistance for help with his rent. In this case a DHP cannot be paid for help towards rent. If Mr Hanson had not been getting his full council tax liability met, you could consider a DHP to help towards his council tax only.

Amount and duration of DHPs

12. Both the level and duration are at the discretion of the local authority, although the level of benefit plus the DHP must not exceed the weekly eligible rent or the weekly Council Tax liability. We have defined the eligible rent as all the payments specified in reg 10 of the HB regs except those specified in reg 10(3)(b)(i) to (iii) (ie deductions in respect of certain specified service charges).

Claims

13. There has to be a claim for DHPs, although how local authorities choose to operate the claiming process is up to them. Claims may be in writing, by telephone, or by any other method (such as by electronic means).

14. Therefore, although the local authority may institute its own procedures as to what constitutes a claim in each case, there has to be something in each instance which triggers the claim - which could be something as simple as a telephone call asking the claimant if they wish to claim DHPs.

15. Local authorities may also consider it good administrative practice to let claimants know of the existence of the DHP arrangements, this could be by way of information on the HB/CTB notifications.

Who can accept claims

16. DHPs are not HB or CTB, so the provisions whereby the BA can accept claims in certain circumstances will not apply to them. Any claims should therefore be directed to local authorities.

Who can claim

17. In most cases, this will be the person entitled to HB or CTB. However, you may also accept claims from someone acting on behalf of the person concerned (eg. an appointee), if you consider it reasonable to do so.

Information needed from claimants

18. It is for the local authority to decide how much information it needs, as well as how the information is supplied, in order to make a DHP decision. Where a separate claim form is used for the purposes of claiming DHPs; for the avoidance of doubt on Data Protection issues, authorities are advised to specify on the HB/CTB claim form that information supplied with the HB/CTB claim may be used in respect of a claim for DHPs.

Time limits for supply of information

19. There are no prescribed time limits.

Duties of claimants

20. A person claiming DHPs is required by the regulations to:

give the local authority such information as it may require to make a decision (or look at a decision again);
tell the local authority of any changes of circumstances that may be relevant to their continuing to get DHPs;
give the local authority such other information as it may require in connection with their claim.

Who you can pay

21. DHPs may be paid to someone other than the claimant if you consider it reasonable to do so. That could be an agent, an appointee or a landlord. In the case of a person entitled to rent rebate or council tax benefit, DHPs can be credited to the rent rebate or council tax account.

Period of award

22. Local authorities are under no obligation to award DHPs for the same period as the claimant´s HB/CTB, but you may consider it administratively more convenient to do so.

Start and end date of award

23. There are no requirements in regulations as to the date a claim should be treated as made or the date that payment should start/end.

Method of payment

24. DHPs may be delivered via HB/CTB payment systems and may also be paid on HB/CTB instruments of payment. But there are important conditions, as follows:

the authority must be able to differentiate, in any given case, between HB/CTB and DHPs (ie there must be a clear audit trail);
where is DHP is paid with HB/CTB, notifications to the claimant must clearly show how much is HB/CTB and how much is DHP.

Payment cycles

25. The frequency of payment and whether to pay in advance or arrears is at local authority discretion, although it may be administratively more convenient to use the same payment cycles as the claimant´s HB or CTB.

Backdating

26. There are no statutory backdating rules for DHPs. Local authorities may operate their own rules, or decide not to backdate at all.

Duty on authorities to notify the claimant

27. If someone claims a DHP, the local authority is required by the regulations to notify that person of the DHP decision, in writing, with reasons, as soon as is reasonably practicable. Authorities may find it easier to put something on existing HB/CTB notification forms but it must be made clear to the claimant that these are not payments of HB/CTB and the amount of the DHPs must be specified, where they are going to be paid.

28. Authorities should also clearly distinguish the dispute/appeal rights that apply to HB/CTB - it is important that claimants are not inadvertently led to believe that such appeals rights also apply to DHPs.

29. Although there is no requirement in the regulations to notify landlords of a DHP decision, it is good practice to tell landlords the amount of a DHP (authorities are already required under the HB legislation to let landlords know how much HB is being awarded).

Changes of circumstances

30. A person getting DHPs is required under the regulations to notify you of any changes of circumstances which may be relevant to their DHPs. You should therefore ensure that the recipient is aware of the changes that he should report. There is no statutory timescale for notification: it is for local authorities to decide. It is also for local authorities to decide the means by which such changes are notified.

Changes that may be relevant

31. Many changes of circumstances that claimants have a duty to report for HB/CTB purposes may also be relevant to their continuing to get DHPs. Authorities may use such information to decide the level of future DHP awards (or whether they should continue).

Disputes

32. If independent tribunals were to be empowered to deal with DHP appeals, to require them to have regard to the cash limit and other financial considerations would fetter their powers to an unacceptable extent. However, local authorities may review DHP decisions in the event of disputes. Of course, the route of judicial review is also available.

33. Local authorities are able to look at a decision again in the light of representations made by the claimant (in whatever form the authority decides) or whenever you consider it appropriate for whatever reason. The legislation does not specify these circumstances in any more detail, so there is considerable flexibility in this area.

34. Local authorities may decide who in the authority may look at a decision again. We suggest that it would be good practice to involve an officer other than the one who made the original decision, or possibly a more senior officer. Outcomes must be notified in writing, with reasons, as soon as is reasonably practical.

Stopping DHPs

35. There are instances other than a change of circumstances when DHPs can be stopped. If the local authority decides that DHPs are being, and/or have been, made because someone has misrepresented or failed to disclose a material fact - be it fraudulently or otherwise - the authority can stop making any further DHPs. The authority can also stop making further DHPs where they have been paid as a result of an error.

Recovering DHPs

36. Local authorities can recover DHPs if they decide that payment has been made as a result of misrepresentation or failure to disclose a material fact - be it fraudulently or otherwise. You may also recover DHPs already made if you decide that they have been paid as a result of an error.

Recovery from ongoing HB or CTB

37. Local authorities may not recover DHPs from ongoing HB or CTB. This is unlike the situation for HB overpayments and CTB excess benefit, where there is a regulatory provision to allow recovery from ongoing HB/CTB. There is no provision for recovery of overpaid DHPs from other benefits.

Looking again at a decision to recover

38. Local authorities should look again at decisions to recover in the light of representations made by the claimant. The same principles apply as in paragraph 29 above.

Unspent central Government funding

39. In order to ensure that the Government contribution is used only for DHPs, local authorities will not be able to retain any unspent amounts.

Contracting out

40. Decisions on DHPs cannot be made by a contractor, although contractors may undertake the administrative tasks connected with the administration of DHPs.

The point of change

41. DHPs may only be awarded in respect of housing costs arising after 1st July 2001 in respect of council tax and 2nd July 2001 in respect of rent. Exceptional hardship and exceptional circumstances payments may not be awarded after these dates.

Department of Social Security (now Department for Work and Pensions) March 2001

Annex A

KEY DIFFERENCES BETWEEN ECPs/EHPs AND DHPs

ECPs and EHPs	DHPs
Part of HB/CTB	Free-standing – not benefit
Regulations prescribe circumstances in which award can be made	Broader scope - regulations provide basic requirements only
Award rests on definition of exceptional circumstance or hardship.	Award depends on whether authority consider person is in need of further financial assistance with housing costs
As part of HB/CTB – dispute arrangements the same as for HB/CTB	Not subject to appeal arrangements, but authority may look at decision again if disputed
Authorities can retain any unspent government contribution (EHPs)	Authorities cannot retain any unspent government contribution
Government contribution can only be used for one "part" - EHPs	Government contribution can go towards all DHP expenditure

MAIN SIMILARITIES BETWEEN ECPs/EHPs AND DHPs

Award is at local authority´s discretion
Subject to weekly limit
Person needs to be entitled to HB and /or CTB
Requirement on authority to notify claimant of decisions
Requirement on claimant to give the authority required information and notify changes of circumstances
Overall expenditure subject to an annual maximum

Annex B