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Emergency support whilst waiting for first payment of UC?

JoIM
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Welfare Advice, Northumbrian CAB

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Hi

Universal Credit is being rolled out in our area from end Feb 2016, so its relatively new to us. Already we are seeing client’s who are struggling to meet their housing and basic living costs during the assessment period. In one instance a woman claimed UC on 27th Feb. She has rent due on 1st March and 1st April, and no income or savings to pay this. She will therefore have two months worth of rent arrears by the time she gets her first payment of UC.

In our area, the policy of the local authority is not to award DHPs to people not already in receipt of Housing Benefit.

Does anyone know of any options for clients in situations like this, other than the advance payment of UC and food banks?

Many thanks.

Daphne
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Hi Jo

Local authorities cannot have a blanket refusal not to award DHPs to those on UC. Schedule 2 para 55 of the Welfare Reform Act 2012 - http://www.legislation.gov.uk/ukpga/2012/5/schedule/2/prospective - amended para 69(1)(a) of the Child Support, Pensions and Social Security Act - http://www.legislation.gov.uk/ukpga/2000/19/section/69 before it is amended - to include UC as a benefit which allows DHPs to be made.

Maybe worth clarifying that with your local authority - I think it’s not the only LA to be behaving like that…

HB Anorak
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I have just edited this post, sorry if it messes up anyone’s reply.

I agree, the Discretionary Financial Assistance Regs as amended require that a DHP applicant has an award of UC calculated by reference to a renter’s housing element.  Your client has that once the UC awarding decision is in place, even if UC hasn’t been paid yet.

HOWEVER ... two problems.

First, since UC is assessed by reference to circumstances at the end of the AP there will not be any decision and therefore no award in place during the first few weeks.  At that stage I don’t think the conditions for a DHP are met.

Second, even if the AP/decision making cycle did not in principle prevent a DHP from being paid, there is also a requirement in the Regs that the claimant requires “further assistance” over and above the UC award to meet her housing costs.  If the UC housing element covers her full, unrestricted rent then the way the Council is looking at it there isn’t any need for further assistance.  A council would not normally award a DHP to a claimant who qualifies for full HB in these circumstances ... they would just pay the HB!  They will be saving their DHP money for people who are still going to be short after the UC payment comes through.

There is an argument that the typically long wait for the first UC payment has created a new situation where a DHP is warranted: it’s all very well saying to the claimant that they will get the money eventually and so a DHP would be a double-whammy windfall ... it won’t seem like that if the windfall is perpetually, tantalisingly one month out of your grasp.  It’s similar to the way that TfL and the Dartford Tunnel people have always got a few quid of my money paid up front, it’s difficult not to feel that I am perpetually £20 down on the deal.

I wonder whether any local authorities have allowed DHPs in this situation?

[ Edited: 3 Mar 2016 at 04:17 pm by HB Anorak ]
Gareth Morgan
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I think that LAs need to be reminded that if they are thinking “If the UC housing element covers her full, unrestricted rent then the way the Council is looking at it there isn’t any need for further assistance” then they are wrong.  Within the Universal Credit payable there is no amount specifically for housing costs.

HB Anorak
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That’s true Gareth, and you could make a perverse case for saying that the higher a person’s non-UC income is the more DHP they could potentially receive: if the taper reduces max UC to £10 a month, the Council could say that you require “further assistance” of several hundred pounds to make up the shortfall in your rent.

But I think it’s a perfectly reasonable approach for the Council to say “lets notionally disaggregate the elements in the max UC and identify why it is this punter is in line for a DHP ... if s/he is at all”.  Most obviously if the claimant has a housing element subject to bedroom tax, that is the root cause of the difficulty they are having paying their rent and it is something tangible you can focus on when deciding whether to award a DHP.  I accept that the need for further assistance could arise from some quirky lacuna in the means test, resulting in a taper than does not truly affect your ability to meet your outgoings.  In that case, even if your housing element is not limited in any way, you could still be in line for a DHP.

The point I was making though is that I don’t think local authorities will necessarily see the UC payment cycle alone as sufficient reason to award a DHP

Ruth Knox
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I can understand the Local Authority’s reluctance to award DHPs given a limited pot in a situation where the money for the rent will eventually come through.  But this delay of two months’ rent seems to by very typical, and even if there are no errors or gaps when it does, (which is often not the case) it puts a huge stress on claimants - if they have arrears already it may take them to the point of a Possession Order or eviction and saying “Don’t worry you won’t actually be evicted if you can prove you are waiting for a payment” is very poor comfort.  This seems to be more or less built into Universal credit so I don’t know how it should be tackled.  Ruth

Paul_Treloar_AgeUK
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Well, in this example, the tenant is being put into two months arrears immediately upon her claim, which immediately makes APA arrangements possible, despite the clear ambition to engineer exactly the opposite outcome more generally. It’s farcical quite frankly and endemic in the brave new world of Universal Credit is Brilliant and solves all Social Justice ills.

SarahJBatty
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The situation of DHP not being assessed until UC decision made is not much different to now, where a DHP wouldn’t be decided until the HB claim had been, but could have arrears paid. Some LAs naming no names take months to put HB into pay.

The big difference with UC is a change in circs or income during that first AP could mean that no UC is paid at all, so therefore no DHP.

The other thing relating to Gareth’s point about housing costs just being part of the calc and not the payment, those affected by the reduced Ben Cap it is suggested will be helped by DHP.  So could include people on UC who had they been on UC would have had HB wiped out altogether?

HB Anorak
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Yes, and there is a clear policy intention that DHPs should be awarded to some people in that situation because an equivalent case under the HB Regs requires the minimum 50p of HB to be preserved: Reg 75D(2).  That is precisely to enable a DHP to be awarded.  Under UC the case for a DHP is even more compelling because under legacy benefits it’s only HB that gets capped so someone capped down to the minimum 50p a week might have considerably more than £500 a week of other benefits.  In UC the £500 cap really is exactly that - it is impossible to receive more than £500 in other benefits besides UC (apart from HB for specified accommodation).  And when it gets reduced further in the autumn ... good grief.  Another very dark cloud gets added to the brewing perfect storm of homelessness, temp acc procurement costs, out of borough placements etc.  It’s hard enough already for local authorities to meet their homelessness duties under current funding arrangements (see this discussion for example: http://nearlylegal.co.uk/2016/02/scenes-from-a-disaster/#comments) and the combination of UC and reduced benefit caps means the central government contribution to temp acc will be reduced as well.  Never mind, DHPs will make it all better.

There is only one way out of it, as long as HMRC continues to play ball and as long as DWP takes the same, er, tolerant attitude as UC gradually replaces WTC: bogus self-employment!  If you can work 16 hours a week as, say, a telephone cat whisperer (I am not making this up), you will escape the cap.  Under UC of course you will have to take a hit on the taper because exemption from the cap comes through earnings, not hours, but that’s not so bad after you deduct the work allowance.  Bogus self-employment is currently the only thing preventing the country from turning into a Hieronymus Bosch painting, the fiction of economic recovery depends on it.  So HMRC, please don’t pull the rug.

Anyway, Sarah, yes - those cases will indeed be candidates for DHP.

Campbell McCrea
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Am I wrong to think that a DHP cannot be paid in respect of waiting days?

Regulation 2(1)(a) of the Discretionary Financial Assistance Regulations 2001 allows a local authority to make a DHP payment “...to persons who-
(a) are entitled to housing benefit or a relevant award of universal credit…”  Also the Decision Makers Guide allows for backdating of DHP’s, so a claimant could retrospectively claim a DHP. But Regulation 1 of the Discretionary Financial Assistance Regulations 2001 defines a “relevant award of universal credit” as an award of universal credit which includes a housing costs element for rent payments and the Decision Makers Guide also says DHP’s are for periods when a housing costs element is/was ‘payable’.

Also the Universal Credit (Waiting Days) (Amendment) Regulations 2015 define waiting days as periods of non entitlement to UC and specifically state: “20A. For the purpose of determining, under any legislation, whether a person is entitled to any benefit or other advantage by virtue of having an award of universal credit, save where the contrary intention is expressed in that legislation, a person is not treated as being awarded universal credit in respect of any day on which they are not entitled to universal credit.”; This seems to me to exclude the possibility of a DHP claim in respect of the waiting days period from succeeding.

Views to the contrary would be welcomed.

Mike Hughes
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HB Anorak - 03 March 2016 03:56 PM

It’s similar to the way that TfL and the Dartford Tunnel people have always got a few quid of my money paid up front, it’s difficult not to feel that I am perpetually £20 down on the deal.

I wonder whether any local authorities have allowed DHPs in this situation?

OT, but…

http://www.theguardian.com/money/2016/jan/13/penalty-dart-charge-system-dartford-crossing-remote-payment