DHP Policy Board Report
Renfrewshire Council · 3 April 2025
Back to Finance, Resources and Customer Services Policy Board — 3 April 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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_________________________________________________________________ To: Finance, Resources and Customer Services Policy Board On: 3 April 2025 ___________________________________________________________________ Report by: Director of Finance and Resources ___________________________________________________________________ Heading: Discretionary Housing Payments Policy ___________________________________________________________________ 1. Summary 1.1 This paper seeks approval of a revised policy for Discretionary Housing Payments (DHPs). 1.2 The existing DHP policy was approved in 2015. 1.3 In the intervening period operational guidance for DHP decision makers has remained current through regular updates. These have been issued on at least an annual basis. 1.4 The key revisions in the policy relate to: External funding provision is now provided solely by Scottish Government whereas this previously came from a combination of Scottish Government and the Department of Works & Pensions. Applications are no longer sought in relation to DHPs mitigating the Removal of Spare Room Subsidy (otherwise known as the bedroom tax). Awards are automatically made where the qualifying criteria is met. Scottish Government now provide DHP funding to fully mitigate the effects of the Benefit Cap. No applications are required in relation to these DHP awards. The revised policy also takes account of the contents of the Scottish Discretionary Housing Payment guidance manual, published by Scottish Government in March 2024, the creation of which Renfrewshire Council, as part of a small working group, contributed to.
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The current policy makes reference to the Welfare Reform agenda which was ongoing at the time it was written. This section has been removed from the draft policy as it is no longer relevant. References to the Department of Works & Pensions (DWP) have been removed as DHPs were devolved to Scottish Government in 2017. The section covering DHP overpayments, and when they should be recovered, has been expanded based on information contained in SG’s guidance manual. The draft policy contains a new section on Priority Groups which has been recommended in SG’s guidance manual (section 28.2.) As well as reiterating that bedroom tax & benefit cap cases should be fully mitigated, reference is made to a list of other groups of customers, which have now been included in the Council’s operational guidance. 1.5 The key change to existing procedures to have come from the SG guidance manual is that the service no longer seeks applications for Benefit Cap related DHPs awards. Instead, awards are automatically made where the qualifying criteria is met. 1.6 The Council’s updated policy, along with operational guidance issued to the Council’s decision makers, will ensure that DHP applications are assessed in a manner that is consistent with the principles of good decision making, applicable law and guidance. _______________________________________________________________ 2. Recommendations 2.1 Elected members are asked to: a) Note the contents of the report; and b) Approve the Discretionary Housing Payment Policy as set out in Appendix 1. _______________________________________________________________ 3. Background 3.1. Discretionary Housing Payments (DHPs) are awarded to tenants in receipt of housing benefit to wholly or partly make up any difference between housing benefit awarded and the amount of rent payable. Similarly, in the case of tenants in receipt of Universal Credit (UC), DHPs are awarded to wholly or partly make up the difference between any UC awarded in relation to housing costs and the amount of rent payable. 3.2. Renfrewshire Council administers DHPs. The legislation governing DHPs in Scotland is Section 88(1) of the Social Security (Scotland) Act 2018 (The 2018 Act). This legislation is augmented by guidance issued by Scottish Government. The Scottish Discretionary Housing Payment guidance manual was published on 27 March 2024.
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3.3. Each DHP award falls into one of three categories: ‘Other DHPs’/Local Housing Allowance where a tenant experiencing financial hardship has difficulties in paying their rent even after the deduction of housing benefit or a UC housing costs award. These awards are made on a discretionary basis. Benefit Cap where a tenant has had their housing benefit or UC housing costs award reduced to limit the total amount of benefits they receive on a weekly basis. The effects of the Benefit Cap are fully mitigated by DHP awards. Removal of Spare Room Subsidy (otherwise known as the bedroom tax) where a tenant’s housing benefit or UC housing costs award is reduced as they are deemed to be living in rental accommodation that is too big for their needs. The effects of the bedroom tax are fully mitigated by DHP awards. 3.4. Prior to April 2013, funding for DHPs was received from the Department of Works & Pensions (DWP) to provide support to tenants in receipt of housing benefit who were struggling to pay their rent. All DHP awards made by the Council until this time were discretionary in nature. 3.5. From April 2013 the Removal of Spare Room Subsidy (otherwise known as the bedroom tax) came into being which resulted in many tenants having shortfalls, or increased shortfalls, in the amount of their rent which was covered by housing benefit. Scottish Government chose to fully mitigate the bedroom tax through DHP awards and provided councils with additional funding for this purpose. The DWP continued to fund other discretionary awards. 3.6. From April 2017 DHPs were devolved to Scottish Government who provided funding directly to Councils covering full mitigation of the bedroom tax and a ringfenced amount for discretionary awards. 3.7. From late 2022 Scottish Government commenced funding full mitigation of the effects of the Benefit Cap on tenants’ housing benefit and UC housing costs. _______________________________________________________________ 4. Consultation 4.1. On 11th October 2024 the service held a consultation with stakeholders to discuss the draft DHP policy. The session took place virtually via MS Teams. 4.2. The consultation was attended by housing assistants from several housing associations which have a presence within Renfrewshire. In addition, welfare rights officers from multiple organisations took part, as did officers from the Council’s housing service. Advice Works was also represented at the event. 4.3. The draft policy was explored in its entirety and was met with only positive feedback. No suggested amendments were made by any attendees. _____________________________________________________________
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Implications of the Report 1. Financial - DHPs are funded through an annual budget received from the Scottish Government. Where deemed necessary the Council may choose to contribute a top-up of this budget. 2. HR & Organisational Development – None. 3. Community/Council Planning – Our Renfrewshire is fair - An effective Benefits service is vital to the quality of life of many of our citizens as it provides vital support for low-income households to sustain tenancies and meet their rent obligations. Working together to improve outcomes - An efficient and effective billing and administrative process for the collection of local taxes is vital for ensuring the recovery of income to the Council to support the provision of local services. This is supported by a range of payment opportunities for the public, including electronic and digital payments (e.g. Direct Debit, Website and Telephone). Working together to improve outcomes – Efficient and effective customer service is vital to ensuring that citizens have equality of access to Council services, whether this is digitally, by telephone or face to face. 4. Legal – As reflected in this report the proposed new policy has been informed by relevant Law and Guidance. 5. Property/Assets – None. 6. Information Technology – None. 7. Equality & Human Rights - The recommendation contained within this report in relation to a new DHP policy has been considered in relation to its impact on equalities and human rights. No negative impacts on equality groups or potential for infringement of individuals’ human rights have been identified arising from the recommendations contained in the report. 8. Health & Safety – None. 9. Procurement – None. 10. Risk – None. 11. Privacy Impact – None. 12.. Climate Risk – None.
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13. Children’s Rights – When assessing Discretionary Housing Payments, officers consider the financial outgoings of the applicant and are encouraged to ensure that these take full account of expenditure related to the needs of any children in the household. 14. Cosla Policy Position – None. _________________________________________________________ List of Background Papers None. ___________________________________________________________________ Author: Emma Shields, Strategic Service Delivery Manager
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APPENDIX 1 RENFREWSHIRE COUNCIL FINANCE & RESOURCES DISCRETIONARY HOUSING PAYMENTS 1. Background 1.1. Discretionary Housing Payments 1.1.1. Renfrewshire Council administers Discretionary Housing Payments (DHPs). The legislation governing DHPs in Scotland is Section 88(1) of the Social Security (Scotland) Act 2018 (The 2018 Act). This legislation is augmented by guidance issued by Scottish Government. The Scottish Discretionary Housing Payment guidance manual was published on 27 March 2024. 1.1.2. DHPs are awarded to tenants in receipt of housing benefit to wholly or partly make up any difference between housing benefit awarded and the amount of rent payable. Similarly, in the case of tenants in receipt of Universal Credit (UC), DHPs are awarded to wholly or partly make up the difference between any UC awarded in relation to housing costs and the amount of rent payable. 1.1.3. DHPs are funded through an annual budget received from the Scottish Government. Where deemed necessary the Council may choose to contribute a top-up of this budget. 1.1.4. This Policy ensures that the operation of the DHP scheme aligns with the Council’s core values – being fair, helpful, collaborative and continuously improving service delivery through lessons learned. 2. Policy Purpose & Objectives 2.1. Purpose: 2.1.1. The purpose of this policy is to: Specify how the council’s Benefits Service will operate the DHP scheme. Detail the factors that will be considered when deciding if a DHP can and should be awarded.
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APPENDIX 1 Allow discretion to be exercised in the assessment of Financial Hardship DHP applications, which include awards made under the ‘Other DHPs’ & ‘Local Housing Allowance’ funding categories. The operational guidance for decision makers demonstrates the flexibility which can be utilised in individual circumstances. Set the criteria for awarding DHPs in relation to customers negatively affected by either the implementation of the Benefit Cap or the removal of the Spare Room Subsidy (otherwise known as the bedroom tax). Ensure each application is treated strictly on its merits and that all customers will receive equal and fair treatment. Take account of the ‘Scottish Discretionary Housing Payment: guidance manual” issued by the Scottish Government. 2.2. Policy Objectives 2.2.1. The objectives of this policy are to: Assist with the alleviation of poverty. Help customers to sustain their tenancies. Assist customers threatened by homelessness. Assist in keeping families together. Support domestic abuse victims who are trying to move to a place of safety. Support the vulnerable and the elderly. Support young people in the transition to adult life. 2.3. Policy Risks 2.3.1 There is a risk that the DHP hardship budget could be exhausted before the end of the financial year meaning that support couldn’t be provided to customers most in need. To mitigate this risk the budget is closely monitored throughout the year. Award levels can be reduced or increased to ensure that the budget isn’t exhausted before year-end, whilst ensuring that customers receive the maximum support possible.
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APPENDIX 1 3. Policy Commitments 3.1. DHP Decision Making 3.1.1. All decisions will be made in a manner that is consistent with the ordinary principles of good decision making, applicable law and guidance. 3.1.2. The Council will act fairly, reasonably and consistently. 3.1.3. Discretion will be used reasonably and lawfully. 3.2. Non-hardship Awards Mitigation 3.2.1. Tenants in Renfrewshire who are affected by the removal of the spare room subsidy (known as the bedroom tax) or the benefit cap will have their reduction in HB and UC Housing Costs fully mitigated by DHP awards in line with the directive from Scottish Government. 4. Main Features of the DHP Scheme 4.1. Scope of Awards 4.1.1. DHP is not a payment of housing benefit (HB) or universal credit (UC), but the customer must be in receipt of HB or the housing costs element of UC in order to qualify for a payment. 4.1.2. DHPs provide financial assistance to a qualifying individual to meet, or help towards meeting, their housing costs and can be paid in support of any tenancy type. 4.1.3. DHPs can also be used to provide removal costs, a rent deposit or rent in advance for those with new tenancies where the move will alleviate the effect of welfare reform or financial hardship. 4.1.4. At the Council’s discretion, DHPs will be considered for those who can demonstrate financial hardship after a financial assessment. These DHPs must be applied for, and the council will supply an application form for this purpose. The council decides the appropriate payment amount and period of award based on the customer’s financial situation and taking into consideration its own budgetary constraints. The DHP value can be any amount within the limits set out in law and guidance.
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APPENDIX 1 4.1.5. Financial Hardship DHPs can be awarded for a shortfall in housing costs, to provide support with Earned Income Limits, non-dependent deductions and the Shared Accommodation Local Housing Allowance (LHA) rate. Please Note – this list is not exhaustive. 4.1.6. DHPs paid to those affected by the removal of the spare room subsidy (known as the bedroom tax) will be paid at the full amount they are affected by and do not require a Financial Assessment or formal application. They will be paid by the council when it is clear that an individual is affected by these reductions. 4.1.7. Although housing costs are not defined in the 2018 Act, they usually refer to rental liability, rent in advance, removal costs and rent deposits. However, there are some differences detailed below that apply to those affected by the benefit cap: DHPs paid to those affected by the Benefit Cap will be paid the lower of either the capped amount or their housing costs and do not require a Financial Assessment or formal application. They will be paid by the council when it is clear that an individual is affected by these reductions. In cases where the applicant is on UC and the capped amount exceeds rent, other reasonable costs associated with housing can be included, such as utility costs and service charges up to the value of the capped amount or total housing costs (whichever is lower.) 4.1.8. DHP hardship payments should not be regarded as a long-term solution to the HB/UC entitlement restrictions dictated by current and/or future legislation. 4.2. Exclusions 4.2.1. DHP payments cannot be awarded to: offset an overpayment of HB. cover ineligible service charges. minimise the effect of sanctions imposed in relation to any welfare benefits. assist with Council Tax liability. fund the acquisition of furniture or household equipment.
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APPENDIX 1 mitigate UC deductions that arise because an individual is in receipt of a benefit treated as income. cover increases in rent due to rent arrears (except where the individual would have been eligible for a DHP due to the removal of the spare room subsidy (bedroom tax) or the benefit cap at the time the arrears were accrued). mitigate the effect of a Sanction or reduction in benefit due to the individual’s conduct (for example, non-compliance with work related requirements relating to that benefit). However, exception can be made if the need for assistance is immediate and arose from some exceptional event or circumstances such as: o Sudden and severe financial hardship due to a natural disaster. o Unexpected medical crisis that significantly affects the individual’s or their dependents’ ability to meet basic needs. o Sudden bereavement, family breakdowns or unexpected caregiving responsibilities. o Victims of crime who require immediate assistance to cope with the aftermath. 4.3. Operation of the Scheme 4.3.1. Although the operation of the scheme has many points of discretion, there are a number of legal obligations that must be fulfilled, and these are outlined to decision makers in operational guidance. 4.3.2. As stated in 3.2.1, anyone affected by the Benefit Cap or the Removal of the Spare Room Subsidy (known as the bedroom tax), will have their reduction in HB/UC Housing costs fully mitigated. The other portion of the budget, traditionally known as core or hardship funding, will be used to assist those who require further assistance with housing costs due to circumstances that are not directly related to the above areas. 4.3.3. Where the DHP is to mitigate the effect of the Benefit Cap or the Removal of the Spare Room Subsidy (bedroom tax), awards will be made for the full year where eligibility exists. However, in the case of the Benefit Cap, the payments will be made in arrears to ensure continued eligibility.
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APPENDIX 1 4.3.4. For those who have a shortfall for any other reason, the period of award will depend on the current Operational Guidance in place at the time of the award. This will ensure access to the available DHP fund for as many customers as possible. Subject to budget availability, the decision maker may consider extending the award for a further period in certain circumstances (decision makers will be provided with operational guidance to support them in making these decisions). 4.3.5. The Council will aim to deal with DHP requests within a timescale set in line with the housing benefit new claims processing target. DHP applications made where there is a risk of eviction will be escalated for priority processing. 5. DHP Procedures 5.1. Decision Making Training 5.1.1. Decision makers who are responsible for awarding DHPs will be trained on and be provided with guidance on: when an application is required and what form it may take. factors which should be considered when deciding if a DHP should be paid. suggested evidence and information which may be required to make a decision. methods of payment and who payments should be made to. how to record decisions for budgetary analysis and Scottish Government information requirements. advice or signposting to be provided to applicants to assist them with their current financial situation. 5.2. Hardship Award Variances 5.2.1. The DHP Budget will be closely monitored and the period of award and percentage of the shortfall to be awarded for Financial Hardship cases may be reduced or increased, depending on the remaining budget position at the date of the check.
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APPENDIX 1 6. Overpayments 6.1. Overpayment Reasons 6.1.1. The Council will make every effort to minimise DHP overpayments. However, where an overpayment occurs, the decision maker will decide whether it is appropriate to recover the DHP by considering SG guidance which states that an overpayment can only be recovered if the council decides the payment was made due to: A misrepresentation or failure to disclose a material fact by the individual (either fraudulently or otherwise). An error was made when the DHP application was determined. A processing error. 6.1.2 Where there is a retrospective change in circumstances which results in an increase in HB or UC housing element, this can be treated as a processing error which resulted in an error in the DHP determination. 6.2. Overpayment Recovery 6.2.1. If it is decided that an overpayment should be recovered, this can be done by recovering from the landlord if the DHP is paid directly to them or the DHP recipient. An invoice will be issued with an explanation as to how the overpayment arose and the period it relates to. In cases where the council is the landlord, the overpayment can be recovered via internal accounting methods. 6.2.2. Attempts will always be made to recover fraudulent overpayments. 7. Dispute Process 7.1. Handling Disputes 7.1.1. Although a claimant has no statutory route for appealing a decision made on a DHP claim, the Benefits Service will operate the following procedure for dealing with any disputed decisions: The customer or anyone nominated on their behalf can dispute the decision in writing, within one calendar month of the date of the decision notification.
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APPENDIX 1 A decision maker, other than the one who made the original decision, will review the information held. If they feel that the original decision is correct, the claimant will be advised in writing that the original decision stands. If the second decision maker does not agree with the original decision, they will consult their Team Leader before substituting their own decision. The claimant will be advised of the new decision in writing. Decisions will be revised only where the original decision maker has failed to follow the correct process or has not made the decision based on sound evidence or information. A sample audit of awards and refusals will be undertaken to ensure adherence to policy commitments and operational guidance. 8. Operational Guidance and Budgetary Review 8.1. Responsibility 8.1.1. The DHP Budget is held by the Senior Service Delivery Officer (Technical Revenues & Financial Support) who will: be responsible for monitoring the DHP budget. produce operational guidance for decision makers. arrange for DHP decisions to be audited to ensure that the operational guidance is being adhered to. analyse expenditure and budgets on a monthly basis and will, where necessary, amend current operational guidance on the length of the award and the percentage of shortfall to be paid. This ensures that expenditure is within budget and correctly profiled for the rest of the year and protects the aim of providing support to those claimants considered to be the most vulnerable. halt further hardship awards in the event that the ringfenced budget is exhausted. 8.1.2. If the council does not spend the full amount received from Scottish Government, usually it must be returned to them.
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APPENDIX 1 9. Publicising DHPs 9.1. Maximising Awareness 9.1.1. Access to DHP scheme awards and advice will be incorporated into the council’s general welfare advice services. 9.1.2. All staff within the Benefits Service and Customer Services will be provided with the details of the scheme and the operational guidance used by the council to operate the scheme fairly and consistently. 9.1.3. The council will pro-actively promote DHPs by working in partnership with local landlords to raise awareness and encourage take-up of DHPs. 9.1.4. The council will make claim forms, leaflets and literature on DHPs available via the council website, Advice Works, other council services, Registered Social Landlords and other suitable locations across Renfrewshire. 10. Priority Groups 10.1. Benefit Cap & Spare Room Subsidy (Bedroom Tax) Removal 10.1.1. Although every DHP is considered on its own, individual merit, the operational guidance will instruct that those cases affected by the removal of the spare room subsidy (known as the bedroom tax) and the benefit cap will have the effect of these fully mitigated. 10.2. Other Groups 10.2.1. In addition, the Council’s operational guidance includes a list of other groups which the Scottish Government guidance (section 28.2) suggests the Council may wish to prioritise. 10.2.2. This list is not exhaustive, and each decision maker will have discretion to use their own judgement in any case they are processing.