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Forum Home  →  Discussion  →  Housing costs  →  Thread

Benefit Cap/UC and DHP

Madamejones
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Benefits Take Up officer - Cheltenham Borough Council, Gloucestershire

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I am just wondering what other LA’s are doing in the following situations as it has only just dawned on me that Benefit Cap cases are going to be penalised when looking at a DHP.

My family have been Capped on and off as Mr is in and out of work. Luckily I have always obtained a DHP and managed to keep a roof over their head for over 5 years!

They have just made a claim for UC. LL is wanting the housing costs of £815 a month paid directly. If he gets this that will leave them £851 a month to live on. I can’t ask for a DHP as it can’t top up living costs.

If rent not paid directly to LL and goes to tenant then I still can’t see how a DHP is going to be awarded? To quote HB Anorak - UC is like a smoothie and you can’t pull out the different components.

Am I missing something obvious here or are future larger families on UC going to come unstuck??

Thanks

Timothy Seaside
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Housing services - Arun District Council

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I haven’t actually looked into this, but I have been working on the assumption that only LHA, bedroom tax, and housing costs contribution cases would be able to get DHP under UC.

Edit: for periodic payments, that is - it wouldn’t make any difference to lump sums.

Madamejones
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Benefits Take Up officer - Cheltenham Borough Council, Gloucestershire

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Timothy Seaside - 10 April 2019 04:59 PM

I haven’t actually looked into this, but I have been working on the assumption that only LHA, bedroom tax, and housing costs contribution cases would be able to get DHP under UC.

Edit: for periodic payments, that is - it wouldn’t make any difference to lump sums.

Yes, my fear too. I work in the Homeless Team so we use DHP’s a lot. Looks like more homeless, large families will be coming our way!

Tom B (WRAMAS)
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HB Anorak
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I think the “smoothie” analogy (credit to Housing Systems for that by the way, not me) is a help rather than a hindrance here.  If we get away from the idea that the final award of UC is earmarked for any particular purpose, there is a great deal of flexibility as the DWP guidance says.  All that is required is that (1) max UC included a renter’s housing element and (2) the claimant is entitled to at least 1p a month of UC.  If those conditions are satisfied, a DHP can be awarded at the LA’s discretion subject only to the limit on the maximum amount: the DHP cannot exceed the amount of the housing element.  That is still a pretty generous margin and more than enough for most cases.  Eg if the housing element was £500, the maximum DHP is £500.

DHPs are for people who require “further assistance” to meet their housing costs.  How can you need further assistance if an MPTL has paid the rent in full?  Well rather obviously if the MPTL has cleaned you out and left you starving, you do need further assistance to meet your housing costs because you are really not in a position to afford those costs and buy food as well.  The DWP guidance acknowledges that, which means there is no problem with a DHP where the benefit cap applies and an MPTL is in place.

The point about lump sums not being limited was dealt with in Gargett (which we discussed the other day on here).  Ms Gargett argued that the Council could magic a lump sum DHP out of thin air to pay off her arrears despite there being no shortfall between her current HB award and her full rent.  The High Court said that was an incorrect interpretation of the Regs: all DHPs must be calculated by reference to a weekly/monthly shortfall, even if the payment is made as a lump sum.  Ms Gargett did not pursue that point further in the Court of Appeal, although the Gargett case did find that the weekly/monthly shortfall can be in the past, it doesn’t have to be current.  But how does this work in a UC case?  Here is where the smoothie comes into play.  Anything less than top whack unrestricted UC and you can say the shortfall affects the claimant’s ability to meet their housing costs.  It seems to me that the LA can award a DHP in any case at all while remaining true to Gargett except where:

- the housing element = the full rent, and
- there is no HCC, and
- the claimant has no income, and
- there is no benefit cap, and
- the two-child limit does not apply

Not saying they will or should award DHPs to everyone who asks, but the flexibility is there.

Madamejones
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HB Anorak - 10 April 2019 07:58 PM

I think the “smoothie” analogy (credit to Housing Systems for that by the way, not me) is a help rather than a hindrance here.  If we get away from the idea that the final award of UC is earmarked for any particular purpose, there is a great deal of flexibility as the DWP guidance says.  All that is required is that (1) max UC included a renter’s housing element and (2) the claimant is entitled to at least 1p a month of UC.  If those conditions are satisfied, a DHP can be awarded at the LA’s discretion subject only to the limit on the maximum amount: the DHP cannot exceed the amount of the housing element.  That is still a pretty generous margin and more than enough for most cases.  Eg if the housing element was £500, the maximum DHP is £500.

DHPs are for people who require “further assistance” to meet their housing costs.  How can you need further assistance if an MPTL has paid the rent in full?  Well rather obviously if the MPTL has cleaned you out and left you starving, you do need further assistance to meet your housing costs because you are really not in a position to afford those costs and buy food as well.  The DWP guidance acknowledges that, which means there is no problem with a DHP where the benefit cap applies and an MPTL is in place.

The point about lump sums not being limited was dealt with in Gargett (which we discussed the other day on here).  Ms Gargett argued that the Council could magic a lump sum DHP out of thin air to pay off her arrears despite there being no shortfall between her current HB award and her full rent.  The High Court said that was an incorrect interpretation of the Regs: all DHPs must be calculated by reference to a weekly/monthly shortfall, even if the payment is made as a lump sum.  Ms Gargett did not pursue that point further in the Court of Appeal, although the Gargett case did find that the weekly/monthly shortfall can be in the past, it doesn’t have to be current.  But how does this work in a UC case?  Here is where the smoothie comes into play.  Anything less than top whack unrestricted UC and you can say the shortfall affects the claimant’s ability to meet their housing costs.  It seems to me that the LA can award a DHP in any case at all while remaining true to Gargett except where:

- the housing element = the full rent, and
- there is no HCC, and
- the claimant has no income, and
- there is no benefit cap, and
- the two-child limit does not apply

Not saying they will or should award DHPs to everyone who asks, but the flexibility is there.

Thank you very much Peter. This is what I needed to hear.

:-)

GCH Tenancy Sustainment
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Tenancy Sustainment Team Gloucester City Homes (GCH)

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Hi All,

Looking for some supporting legislation or guidance on the above. We are having all our UC and Benefit Cap DHP applications being turned down. This is regardless of the amount of cap and shortfall in expenditure. The local council has taken the stance that ‘your rent is covered in full with the housing element of universal credit therefore there is no shortfall of rent for us to award a DHP against’.

It appears they do not fully understand the ‘smoothie’ concept and despite review requests explaining this and taking info from HB Anorak post above they are still being refused.

(DHPs for HB and legacy benefits are being awarded).

Thanks in advance

Va1der
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GCH Tenancy Sustainment - 09 September 2020 08:45 AM

Hi All,

Looking for some supporting legislation or guidance on the above. We are having all our UC and Benefit Cap DHP applications being turned down. This is regardless of the amount of cap and shortfall in expenditure. The local council has taken the stance that ‘your rent is covered in full with the housing element of universal credit therefore there is no shortfall of rent for us to award a DHP against’.

It appears they do not fully understand the ‘smoothie’ concept and despite review requests explaining this and taking info from HB Anorak post above they are still being refused.

(DHPs for HB and legacy benefits are being awarded).

Thanks in advance

See 2.11 in the DHP guidance manual, which covers APA/MPTLs - in that example, not only is there a (potentially) full HE awarded, it is being being paid directly to the landlord, meaning s/he does not experience any shortfall, and DHP can be paid to the claimant instead.
https://www.gov.uk/government/publications/discretionary-housing-payments-guidance-manual

If the council raises any further grief, I would highlight that they are acting against the guidance in a time where everyone should be more lenient to avoid evictions during a pandemic!

GCH Tenancy Sustainment
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Tenancy Sustainment Team Gloucester City Homes (GCH)

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Thanks for the above, will certainly highlight it with the council and hope for the best.

However none of our clients have a MPTL in place. The total award is being paid to the claimant and they are still stating full housing costs being paid. Think it is a lack of understanding that the cap applied to the whole award and not a particular element within it.

Not sure how else to make them understand?!

Va1der
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My point was that even where an MPTL is paying full rent to the landlord, a DHP can be awarded. The situation you are describing is, to my mind, a lesser test.

Paul_Treloar_AgeUK
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Information and advice resources - Age UK

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If they say they have a blanket policy on this, maybe a letter before action might wake them up a bit as that’s very much against principles of public law I believe.

Gareth Morgan
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If thy are fettering their discretion then they’re bang to rights.  That does depend on the issue being one where they have discretion.

Prisca
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benefits section (training & accuracy) Bristol city council

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i would put
1) ask the DHP for clarification of how the DHP team determine which element of the UC has been capped and how have they come to the conclusion that the housing element isnt affected by the cap.?

UC is paid as a sum of its parts, and any reduction/ deduction is taken from that total sum,, not from any individual element included in that total

Any benefit cap means there is a shortfall and as long as UCHE is in payment, then a dhp can be awarded up to that amount

if that doesnt prodice a response, id kicjk off down the complaint / councillors/ MP route.

its basic stuff, UC has been around long enough for HB/DHP staff to know when a DHP is warranted/ permissible and how to maximise that award.

KMJones
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Do have a look at CPAG’s template judicial review letter for DHP refusals where a UC managed payment to landlord is in place: https://cpag.org.uk/welfare-rights/judicial-review/judicial-review-pre-action-letters/discretionary-housing-payments

Although not appealable, the decisions may be challenged (through the JR route) where LAs are failing to apply the correct factors to their decision making processes.

The DWP guidance on DHPs is clear that it is to cover shortfalls caused by application of benefit cap and that a DHP may be awarded where a managed payment is in place. LAs should be challenged to ensure their own processes are compliant with that guidance.

Do contact .(JavaScript must be enabled to view this email address) for help with the template or judicial review in general.