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DHP refused because earned income results in loss of housing element of UC
We have applied for a DHP for a couple of people now who were getting the housing element of UC but, at the point of DHP being decided, their income had increased so they were getting standard element but no housing element of UC so DHP refused as will only pay if entitled to Housing Element. Is this right and is the Housing Element deducted from UC before the Standard Element? I can’t find calculation showing which part of UC is deducted first when someone starts work.
I’m pretty sure that’s wrong. I don’t think you can make any easy assumptions about which “bit” of the UC award has been reduced or removed - there’s no order.
The key determinant is that the claimant is entitled to a housing costs element and there is still some UC in payment.
This is a bit different to HB - if your income wiped out your HB entitlement you would not be entitled to a DHP.
Hi Andy
Thank you for your reply. This is what I think as far as I can see all your elements are added up as entitlement and then deductions due to income calculated and deducted from UC but nothing to determine which part they take first so as long as they still get some UC should be entitled to DHP as only reason stopped is because of income
and bearing in mind also that UC will not itemise the different bits you are getting, so how could council know there’s no housing element being paid? they can’t know…
That’s right. The information LA’s get from UC (for council tax reduction purposes) simply states what UC elements have been awarded, what income has been taken into account in the assessment (sometimes!), and what monthly amount of UC will actually be paid.
We have applied for a DHP for a couple of people now who were getting the housing element of UC but, at the point of DHP being decided, their income had increased so they were getting standard element but no housing element of UC so DHP refused as will only pay if entitled to Housing Element. Is this right and is the Housing Element deducted from UC before the Standard Element? I can’t find calculation showing which part of UC is deducted first when someone starts work.
There is no deduction from specific elements of UC. The Standard Allowance and various elements are added together to determine the maximum UC payment and other income is used to calculate a deduction from that total amount - not from the various elements. Entitlement to the various elements remains regardless of the amount actually paid. This is all fairly clear if you look at the UC monthly statements.
I wonder what the local authority thinks its doing. Maybe it intends not to pay a DHP if the UC payment is below a certain level - possible less than the Standard Allowance - but if that’s what it intended it should say so. If they are saying they won’t pay a DHP on the grounds that there’s no entitlement to the Housing Element I think they are wrong.
I suspect they might have been on my course where I demonstrate alternative ways of looking at DHPs. In one example, the claimant has earnings and a work allowance; his 63% taper exceeds the amount of the housing element; he applies for a DHP to mitigate the bedroom tax. I point out that there is no legal reason why he cannot have a DHP in theory up to an amount that matches/doubles the housing element that went into the max UC amount - but the Council might not consider him to be the most compelling candidate for a DHP because, compared with a lot of people on benefit, he has plenty of money that the means test hasn’t touched, i.e. the work allowance and 37% of the rest of his earnings which together far exceed the bedroom tax. So if the budget is tight and hard choices have to be made, it’s probably a No. If that’s what the Council has done here, I’d say that’s fair enough.
On the other hand, if they believe that a taper > the housing element means the award does not include a housing element, that is indeed entirely misconceived. It’s a smoothie, not a fruit salad as @HousingSystems like to remind us! The Regs require only that the maximum amount was determined by reference to a housing element - it is impossible to say that any particular element is left in the jug or poured away.
can I jump on this thread rather than start a new one as it is a related issue (well 2 issues)
re: HC in UC. we are being told that our LA can only allow DHPs for UC claimants where there is an actual shortfall in HCE (eg as a result of under occupancy, LHA, benefit cap etc) but if full amount is included in UC award then a DHP cannot be granted as all HC are covered. I have argued that this does not take account of income tapers. The comparative system for HB is based on eligible rent, but if people are struggling due to high outgoings and HB being reduced by income taper, then they may still get an award. To be fair, our HB dept did try to use a formula to take income taper into account and were told by DWP that they could not do this. As a result, we are routinely getting applications turned down if there is no shortfall. We have had some success in getting a lump sum payment to clear arrears (usually vulnerable people at risk of homelessness) but this isnt something they will consider very often (and say that the arrears have to have come from a past shortfall between HC and rent) which leads me on to the subject of arrears
arrears: there seems to be a bit of inconsistency around this issue with help being allowed in exceptional circumstances, and other applications being refused as a blanket policy using the argument - you receive full HC in UC award, therefore do not qualify for help (regardless of how the arrears accrued) so I would be grateful for any clarification on the issue of shortfall in HC vs cant afford to pay everything as a result of income taper and outgoings and also the issue of arrears - can they be considered if they havent arisen as a result of HC shortfall in UC calculation (eg arrears could have been there for several years for a number of reasons; in my case, such arrears are preventing a client moving to a more suitable property and he cant afford to clear this due to high level deductions from UC)
Interested to know others experiences
thank you
There’s nothing to stop DHP’s being paid in “income taper” cases. LA’s may not do it very often, since there is obviously a certain “logic” in having some “spare” income which means that you should be able to budget to meet the shortfall. But it can still be considered, maybe on a short-term basis, or maybe because the claimant has some additional unavoidable expenses.
There’s also nothing to say you have to be too hung up on how rent arrears occurred in order to consider paying them. It makes sense if arrears are stopping somebody moving to a cheaper, more sustainable tenancy; or if the alternative is homelessness with an accompanying (expensive) housing duty on the same LA!
We have applied for a DHP for a couple of people now who were getting the housing element of UC but, at the point of DHP being decided, their income had increased so they were getting standard element but no housing element of UC so DHP refused as will only pay if entitled to Housing Element. Is this right and is the Housing Element deducted from UC before the Standard Element? I can’t find calculation showing which part of UC is deducted first when someone starts work.
I think this is correct though if it isn’t I hope wiser heads will let us know. See Regulation 2 of the Discretionary Financial Assistance Regulations 2001 as it was amended by Regulation 2 of the Welfare Reform Act 2012 (Consequential Amendments) Regulations 2013.
As to the other issues raised in this thread, the local authority has to be careful that it doesn’t fetter its discretion.
We have applied for a DHP for a couple of people now who were getting the housing element of UC but, at the point of DHP being decided, their income had increased so they were getting standard element but no housing element of UC so DHP refused as will only pay if entitled to Housing Element. Is this right and is the Housing Element deducted from UC before the Standard Element? I can’t find calculation showing which part of UC is deducted first when someone starts work.
I think this is correct though if it isn’t I hope wiser heads will let us know. See Regulation 2 of the Discretionary Financial Assistance Regulations 2001 as it was amended by Regulation 2 of the Welfare Reform Act 2012 (Consequential Amendments) Regulations 2013.
As to the other issues raised in this thread, the local authority has to be careful that it doesn’t fetter its discretion.
No it isn’t correct. The requirements for a DHP are (1) the claimant has an award of UC - at least 1p a month - and (2) the maximum amount from which the award was calculated included a housing element. As discussed higher up the thread, it is impossible to say that the final award consists of this or that element: it is a single generic sum. I do like Housing Systems’ smoothie image. UC is worked out like this:
- fill up a jug with different fruits representing living costs, housing costs, child care fees etc
- at this stage, you can see layers of fruit in the jug and you can how much of the total volume of fruit is attributable to each fruit
- now blitz it. It is no longer a jug of separate fruit layers
- if the claimant has any income, some or all of this smoothie will be poured away but if there is at least one drop left the claimant is potentially in line for DHP, just as long as some housing berries went in the jug at the start
- trying to calculate how many housing berries are left in the jug, or how many have been poured out, will be a (ahem .. sorry) fruitless task.
We have applied for a DHP for a couple of people now who were getting the housing element of UC but, at the point of DHP being decided, their income had increased so they were getting standard element but no housing element of UC so DHP refused as will only pay if entitled to Housing Element. Is this right and is the Housing Element deducted from UC before the Standard Element? I can’t find calculation showing which part of UC is deducted first when someone starts work.
I think this is correct though if it isn’t I hope wiser heads will let us know. See Regulation 2 of the Discretionary Financial Assistance Regulations 2001 as it was amended by Regulation 2 of the Welfare Reform Act 2012 (Consequential Amendments) Regulations 2013.
As to the other issues raised in this thread, the local authority has to be careful that it doesn’t fetter its discretion.
No it isn’t correct. The requirements for a DHP are (1) the claimant has an award of UC - at least 1p a month - and (2) the maximum amount from which the award was calculated included a housing element. As discussed higher up the thread, it is impossible to say that the final award consists of this or that element: it is a single generic sum. I do like Housing Systems’ smoothie image. UC is worked out like this:
- fill up a jug with different fruits representing living costs, housing costs, child care fees etc
- at this stage, you can see layers of fruit in the jug and you can how much of the total volume of fruit is attributable to each fruit
- now blitz it. It is no longer a jug of separate fruit layers
- if the claimant has any income, some or all of this smoothie will be poured away but if there is at least one drop left the claimant is potentially in line for DHP, just as long as some housing berries went in the jug at the start
- trying to calculate how many housing berries are left in the jug, or how many have been poured out, will be a (ahem .. sorry) fruitless task.
Thanks. Sorry I got it wrong.
- fill up a jug with different fruits representing living costs, housing costs, child care fees etc
- at this stage, you can see layers of fruit in the jug and you can how much of the total volume of fruit is attributable to each fruit
- now blitz it. It is no longer a jug of separate fruit layers
- if the claimant has any income, some or all of this smoothie will be poured away but if there is at least one drop left the claimant is potentially in line for DHP, just as long as some housing berries went in the jug at the start
- trying to calculate how many housing berries are left in the jug, or how many have been poured out, will be a (ahem .. sorry) fruitless task.
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I love this - thank you for the clarification - lets see how far I get with this
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/692240/discretionary-housing-payments-guide.pdf is also pretty clear about what HBA says above should you wish to steer clear of fruit based analogies
It’s a concern that so many LA’s seem to think there’s some “order” in which the parts of a UC max award are removed wholesale, and in fact why they would assume it’s the HCE that would be first anyway. Would be interesting to know where they’re getting that idea from.
No it isn’t correct. The requirements for a DHP are (1) the claimant has an award of UC - at least 1p a month - and (2) the maximum amount from which the award was calculated included a housing element. As discussed higher up the thread, it is impossible to say that the final award consists of this or that element: it is a single generic sum. I do like Housing Systems’ smoothie image. UC is worked out like this:
This is also consistent with legacy benefits, where the JSA/IS/ESA erodes first and then housing benefit only once the income has taken the claimant out of those.