This briefing paper explains the funding position and considers evidence on how Discretionary Housing Payments (DHPs) are allocated by local authorities. DHPs are applied to help with shortfalls between Housing Benefit and the rent due in certain circumstances.Jump to full report >>
Where a claimant is eligible for Housing Benefit but experiences a shortfall between the rent due and the Housing Benefit payable (e.g. because they live in a property that is deemed to be too large for their needs, or the rent charged is higher than the Local Housing Allowance rate) they can apply to the local authority for a Discretionary Housing Payment (DHP).
There is no obligation on authorities to pay DHPs. The Department for Work and Pensions (DWP) has issued guidance for authorities (updated in March 2018) but the method of allocation adopted and decision making process lies with local authorities.
Increasing the level of funding for DHPs was one of the ways in which the Coalition and Conservative Governments sought to mitigate the impact of some of the reductions to Housing Benefit entitlement introduced between 2010 and 2017. These reductions included the under-occupation deduction for working-age claimants in social housing (also referred to as the ‘Removal of the Spare Room Subsidy’ or ‘bedroom tax’), the household Benefit Cap and reforms to the Local Housing Allowance (for claimants in private rented housing).
Alongside the announcement of further cuts to Housing Benefit entitlement as part of Summer Budget 2015, the Chancellor said that £800m would be made available for DHPs over five years to 2020/21.
Measures in the Scotland Act 2016 have given the Scottish Parliament legislative competence to develop its own DHP scheme. DHPs for Scotland were fully devolved from 1 April 2017. The Department for Work and Pensions is now obliged to transfer DHP funding to Scotland.
Welfare reform implementation was delayed in Northern Ireland – the under-occupation deduction was introduced for social housing tenants from 20 January 2017. The Department for Communities has committed to mitigate tenants against the impact up to 2020. Only private tenants can apply for a DHP in Northern Ireland.
The Welsh Government took steps to increase funding for DHPs in 2013/14 but this has not been repeated in subsequent years.
Evidence on the use of DHPs has raised questions around the adoption of different practices by local authorities – leading to allegations of a ‘postcode lottery.’ There are references to disabled tenants (particularly those living in adapted properties) struggling to access DHPs in some areas, coupled with issues around the need to submit repeat applications and the consequent uncertainty and anxiety associated with this. The adequacy of the overall level of DHP funding has also been questioned.
Information on the implementation of the under-occupation deduction from Housing Benefit in social housing can be found in Library briefing paper 06272, Under-occupation of social housing: Housing Benefit entitlement. A further briefing paper considers evidence on the impact of the under-occupation deduction: 06896, The impact of the under-occupation deduction from Housing Benefit (social rented housing).
Commons Briefing papers SN06899
Authors: Wendy Wilson; David Foster