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DHP if full housing costs in pay
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Money Advice Team, Thirteen Group
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We have a case where a tenant is getting DHP despite having full HCE in UC. I’ve never come across this before, as LA’s usually won’t pay where there’s no shortfall. The guidance doesn’t seem to explicitly disallow it, and another adviser has suggested that, with UC, if income exceeds outgoings it can be paid even with full HCE awarded. This seems counterintuitive as it would effectively pay housing costs twice.
Anyone know if this is a)possible and b)ever done in practice.
We suspect the client may have had a change in circs that means they didn’t get full HCE but now does, and not that it’s due to any I&E. As a landlord there’s a concern that this could become recoverable from the rent account at some point.
Thanks, hive mind!
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Accountant, Haffner Hoff Ltd, Manchester
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Has their UC award been reduced due to income at all?
I’ve had a case where the LA paid a DHP in order to clear rent arrears.
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Welfare Rights Officer with SWAMP Glasgow
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Are they affected by the benefit cap? UC doesn’t differentiate - it just reduces the whole award, so the HCE would still show as awarded in full on the UC account. DHP can be awarded in that circumstance.
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Volunteer adviser - Corby Borough Welfare Rights & CAB
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We have succeeded in obtaining a DHP for removal costs for a client who received full HB.
A different LA has also refused a DHP for removal costs in similar circumstances, a decision which was confirmed on review, citing the fact that there was no shortfall between rent and HB payments. We were prepared to go to JR, but in the meantime our client obtained a charitable donation to cover the costs of removal, and backed out.
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Housing services - Arun District Council
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Joined: 20 September 2018
There is a fundamental difference between UC and HB in how much DHP the regs allow to be paid in a periodic award. In HB the periodic DHP award + HB cannot exceed the rent. In UC the periodic DHP award cannot exceed the rent. A periodic award is an award that relates to a period of UC or HB (rather than to a one off cost).
It seems to me that this difference comes down to the smoothie/fruit salad analogy beloved of HBAnorak (which he is always quick to point out is not his own invention): there is no delineation between the different parts of the award when it is paid.
I have a tenant who has a shortfall of about £50 per month due to bedroom tax (children subject to interim care order). She is getting a DHP of about £150 per month because her income and expenditure calculation showed a large budget deficit, and the decision maker agreed that the DHP was able to be used to cover the difference between her UC and what she needs to pay her outgoings (including rent).
It would be surprising if an authority awarded a DHP in ignorance of the rent and UC levels, so I don’t think the OP question is likely to be a mistake. Even if it is, I’m not sure whether there is any mechanism for an authority to recover DHP in this situation - I wonder if anybody else knows of anything?
In respect of removal costs, etc. the calculation does not have anything to do with any rent shortfall. One off, and bulk payments of DHP aren’t restricted in the same way as periodic payments. There is case law to suggest that rent arrears should be treated as periodic payments (i.e. DHP can only be applied if there was an award of UC/HB at the time of the missed payments, and only up to the maximum allowed for periodic payments) but it’s quite common to see DHPs which justify such a payment on the basis that it is a one-off payment to avert homelessness, or to allow a person to move.
I think it’s worth noting that it’s unlikely that anybody will challenge a DHP that is made - they will only challenge a refusal.
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Welfare rights adviser - Plumstead Community Law Centre
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It is certainly possible for a DHP to be made to cover past arrears even though there is no current shortfall
This was put beyond doubt by the Court of Appeal in R(MS NATASHA GARGETT)- and - LONDON BOROUGH OF LAMBETH [2008] EWCA Civ 1450
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- R_v_Lambeth_ex_p_Gargett_CA_DHPs.rtf (File Size: 74KB - Downloads: 2612)
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Benefits specialist - South Somerset District Council
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I have been looking into this recently as we have had cases where the smoothie (final UC payment) less reasonable expenses will not meet the ongoing rent and there is no UC deductions or HCE restriction.
This has occurred due to the increase in the cost of living (notably gas, electric etc).
So if it were HB / ESA (your fruit salad) then the regs would prevent a DHP as the HB would meet the rent however, I have been reading (a lot) and cannot see anywhere that it suggests your cannot award a DHP in the circumstances where a full UC award does less reasonable expenses means there is a shortfall.
I am concerned that by making such an award we would be opening the floodgates so to speak and also hide the fact that this is a massive social policy issue that needs to be addressed.
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Accountant, Haffner Hoff Ltd, Manchester
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I’m not sure I agree.
Despite being a ‘smoothie’, if no deductions have been made from the UC ‘maximum amount’, then I don’t think you can argue that the housing element had not been paid. So I think Para. 25 of the Gargett decision will still bite.
If any deduction had been made, then I think you could argue that the full deduction may be treated as being made from the housing element.
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Housing services - Arun District Council
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Charles - 25 February 2022 12:02 PMI’m not sure I agree.
Despite being a ‘smoothie’, if no deductions have been made from the UC ‘maximum amount’, then I don’t think you can argue that the housing element had not been paid. So I think Para. 25 of the Gargett decision will still bite.
If any deduction had been made, then I think you could argue that the full deduction may be treated as being made from the housing element.
I don’t think you need to argue that the housing element had not been paid or that there was any deduction which could be treated as coming out of the housing element. To me, this is the clear distinction in how Reg 4 of the DFA Regs 2001 relates to housing costs in HB and UC.
Gargett is about HB and I think it is clearly distinguished from any UC argument. The comments in Para 25 seem to me to be about how the DFA Regs interact with Reg 12 of the HB Regs for working out what figure to use in Reg 4(1) of the DFA Regs - i.e. the bit about HB. So it’s not about UC at all - Gargett doesn’t bear on the wording of Reg 4(2).
I would say Reg 4(2) is very clear - in UC the maximum DHP award is the HCE as calculated in Sch 4 of the UC Regs. So if the deductions for bedroom tax and HCC reduce the HCE to less than 50% of the rent, a DHP would not be able to make up the shortfall. But equally you can have a situation where a DHP can increase a person’s income so that it is higher than their maximum UC.
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Accountant, Haffner Hoff Ltd, Manchester
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Timothy Seaside - 28 February 2022 11:33 AMI don’t think you need to argue that the housing element had not been paid or that there was any deduction which could be treated as coming out of the housing element. To me, this is the clear distinction in how Reg 4 of the DFA Regs 2001 relates to housing costs in HB and UC.
Gargett is about HB and I think it is clearly distinguished from any UC argument. The comments in Para 25 seem to me to be about how the DFA Regs interact with Reg 12 of the HB Regs for working out what figure to use in Reg 4(1) of the DFA Regs - i.e. the bit about HB. So it’s not about UC at all - Gargett doesn’t bear on the wording of Reg 4(2).
I would say Reg 4(2) is very clear - in UC the maximum DHP award is the HCE as calculated in Sch 4 of the UC Regs. So if the deductions for bedroom tax and HCC reduce the HCE to less than 50% of the rent, a DHP would not be able to make up the shortfall. But equally you can have a situation where a DHP can increase a person’s income so that it is higher than their maximum UC.
Para. 25 of Gargett is more about Reg. 2 of the DFA Regs, and says that although the actual award of HB is NOT specified as a deduction in Reg 12 of the HB Regs, it still cannot be duplicated due to Reg. 2 of the DFA Regs. I think the same would therefore apply to UC.
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Housing services - Arun District Council
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Catblack - 25 February 2022 10:28 AMI am concerned that by making such an award we would be opening the floodgates so to speak and also hide the fact that this is a massive social policy issue that needs to be addressed.
At the risk of mixing metaphors, I think of the DHP fund as the government’s way of weeing on a fire (that it started, and poured petrol on). Floodgates make it sound much grander, but I think most LAs are really only dealing with a bladder full of assistance. I’m pretty sure it’s not going to hide the social policy issues, but just provide some relief to some people.
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Housing services - Arun District Council
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Charles - 28 February 2022 11:46 AMPara. 25 of Gargett is more about Reg. 2 of the DFA Regs, and says that although the actual award of HB is NOT specified as a deduction in Reg 12 of the HB Regs, it still cannot be duplicated due to Reg. 2 of the DFA Regs. I think the same would therefore apply to UC.
As usual, I think your argument is strong, but I am not entirely convinced. I would still seek to distinguish Gargett as an HB case. Calculating eligible rent in HB is completely different from the calculation under Sch 4 in UC - the UC amount is already likely to be much lower than eligible rent due the bedroom tax and HCC; so you’re not comparing like with like. If you’re talking about Reg 4 as the starting point, isn’t the logical outcome of your argument that you wouldn’t be able to get a DHP to cover bedroom tax unless you had some other deduction from UC?
It doesn’t help that I think Gargett was wrong anyway. I think the phrase ““further financial assistance” with “housing costs”” is a selective and distorted reference to what Reg 2(1)(b) says, i.e.: “appear to such an authority to require some further financial assistance (in addition to the benefit to which they are entitled) in order to meet housing costs” - it’s really not the same and it leads to what I think is a harsh interpretation.
Ultimately, as I have said before, arguments about when a DHP can be used are really only tested when somebody is challenging refusal to grant a DHP; so if you’ve got a DHP to cover more than your UC bedroom tax, or more than your general UC deductions, you’re not generally going to argue.
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Accountant, Haffner Hoff Ltd, Manchester
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I would certainly agree that in any case where the housing element does not cover the full rent that a DHP could be awarded.
Catblack’s case however, as I understand it, was where the rent IS fully covered by HB/UC, with no deductions made, but the client faces a budget shortfall due to their cost of living not being covered by other income/benefits.
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Benefits consultant/trainer - hbanorak.co.uk, East London
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I agree with Charles on this. I read para 25 of Gargett as saying that if someone is already getting as much assistance as it is possible for anyone to get, with the most favourable possible benefit entitlement for a person in their circumstances, that person cannot need any further assistance.
In HB that means full unrestricted eligible rent with no income taper, no NDD and no benefit cap.
In UC that means full unrestricted rent with no HCC, no income taper to reduce the combined amount of all elements forming maximum UC, and no benefit cap.
A DHP is only possible where there is any of the following:
- A restriction like bedroom tax or LHA meaning the housing element/max HB is less than the full rent
- An NDD or HCC
- The benefit cap
- An income taper
I think it is arguable that there is one additional possibility on the UC side which is the two-child limit. You could perhaps argue that a restriction on the amount allowed for living costs has a direct displacement effect on ability to pay rent and generates a need for further assistance to pay rent. Then again, maybe you could make the same argument in an HB/Tax Credit case, I don’t know.