Discretionary Housing Payment Policy 2025
Argyll and Bute Council · 26 November 2025
Back to Argyll and Bute Council — 26 November 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
ARGYLL AND BUTE COUNCIL COUNCIL FINANCIAL SERVICES 26 NOVEMBER 2025 DISCRETIONARY HOUSING PAYMENT POLICY 2025 1.0 EXECUTIVE SUMMARY 1.1 The Council’s draft Discretionary Housing Payment (DHP) Policy has been revised to reflect new statutory Scottish Government Guidance issued in May 2025 effective from 1 April 2025 under section 88(1) of the Social Security (Scotland) Act 2018. The last policy update was in June 2020. 1.2 The fund is a statutory mitigation tool which ensures that households in Scotland are protected from the impact of welfare reforms such as the removal of the spare room subsidy (commonly referred to as the ‘bedroom tax’) and the benefit cap. It also provides vital support to private rented sector tenants affected by the limits of the Local Housing Allowance (LHA) rate and more widely for any household experiencing acute financial hardship. 1.3 In 2025/26 Argyll and Bute’s DHP allocation is £1.323 million of which £956,086 has already been spent or committed by 31 August 2025 primarily aligned to the two statutory welfare reform mitigations, “bedroom tax” and the benefit cap. 1.4 The draft policy has been shaped by lived experience feedback from the Poverty Experienced Citizens Panel (through the Poverty Alliance and the Taking Action on Rural Poverty banner) and with the multi-agency Financial Inclusion and Advice Group (FIAG) chaired by the Council Leader. This group includes representatives from Welfare Rights, Registered Social Landlords (RSLs) and key advice agencies across the area for consultation. 1.5 The Council’s DHP policy has been updated to comply with revised Scottish Government guidance and to simplify the application process, improving accessibility while maintaining existing eligibility principles. This ensures statutory compliance, maximises the use of the fund and reinforces DHP as a frontline homelessness prevention measure.
Page 2
ARGYLL AND BUTE COUNCIL COUNCIL FINANCIAL SERVICES 26 NOVEMBER 2025 DISCRETIONARY HOUSING PAYMENT POLICY 2025 2.0 INTRODUCTION 2.1 The DHP scheme enables local authorities to provide discretionary financial assistance to households in receipt of Housing Benefit or the housing costs element of Universal Credit, where those benefits do not meet full housing costs. 2.2 In Scotland, DHPs are devolved and funded by the Scottish Government. Since 2017, Scottish Ministers have committed to using DHPs as a central tool to mitigate the Bedroom Tax in full, to support families affected by the Benefit Cap, and to provide flexible support in other cases of financial hardship. 2.3 This report provides an update on the Council’s DHP policy, which has been revised to ensure full compliance with the latest Scottish Government guidance (issued May 2025, effective April 2025) and to reflect feedback from stakeholders. The updated policy simplifies administration by allowing awards to be made without a formal claim form where sufficient information is already held, for example, in cases affected by Benefit Cap or Bedroom Tax. It also strengthens accessibility and governance while maintaining the existing eligibility principles and scope of the scheme. 3.0 RECOMMENDATIONS 3.1 It is recommended that the Council – • Note the statutory requirement to update the DHP policy in line with Scottish Government guidance. • Acknowledge the scale and importance of the DHP fund in preventing homelessness and mitigating welfare reforms; • Endorse the implementation of the May 2025 guidance and refreshed policy following consultation with stakeholders, including the Citizens Panel and multi-agency FIAG; and • Approve the revised policy framework set out in Appendix 1.
Page 3
4.0 DETAIL Financial Context and Policy Purpose 4.1 In 2024/25, DHP awards totalling £968,036 were made to 729 households, preventing homelessness and sustaining tenancies across Argyll and Bute. 4.2 For 2025/26, the total allocation is £1,323,585, comprising: • Bedroom Tax: £1,025,447 • Benefit Cap: £195,841 • Other DHPs (including LHA cases and hardship): £102,302 • Total spent and committed in 2025/2026 is £956,086 at 31 August 2025. 4.3 The DHP scheme performs multiple essential functions: • Statutory Mitigation of Welfare Reform o Fully mitigates the Bedroom Tax in Scotland, ensuring no social tenant loses their home due to under-occupancy penalties. o Provides direct assistance to households capped under the Benefit Cap. • Support for Private Rented Sector Tenants o Assists those facing shortfalls between actual rent and the Local Housing Allowance (LHA) rate, a particular challenge in rural and high-cost housing markets. • Assistance in Cases of Financial Hardship o Provides flexible awards to cover arrears, rent in advance, deposits, and shortfalls caused by life changes such as illness, separation, or loss of employment. 4.4 This layered approach makes DHP a critical homelessness prevention measure, directly supporting tenancy sustainment, reducing hardship, and alleviating poverty. Implementation of Guidance (April to November 2025) 4.5 The May 2025 Scottish Government statutory guidance, issued under section 88(1) of the Social Security (Scotland) Act 2018, took effect from 1 April 2025. Although the updated policy will formally take effect from 26 November 2025, to ensure statutory compliance and continuity during consultation the Council retrospectively implemented the procedural changes immediately after 1 April 2025 while seeking formal endorsement through this policy update. Stakeholder Engagement 4.6 The draft policy has been shared widely with other stakeholders operating in Argyll and Bute as follows: • Poverty Experienced Citizens Panel: Feedback from lived experience shaped the accessibility, fairness, and language of the policy. • Multi-agency FIAG: The policy has been circulated to members (Housing Services, Welfare Rights, RSLs, CABs and advice agencies) with feedback shaping the final draft policy proposed.
Page 4
• Scottish Government: The Council met with SG Housing Affordability officials in July 2025 to discuss the draft policy and its alignment with national guidance. 4.7 The following provides a brief timeline in respect of changes to the policy and the proposal to move forward. • June 2020 – Previous policy adopted. • March 2024 – Interim Scottish Government guidance issued. • May 2025 – New statutory guidance issued (effective April 2025). • August 2025 – Draft policy finalised following Citizens Panel feedback. • September 2025 – Feedback provided by multi-agency FIAG following consultation. • 6 October 2025 – Final policy to be submitted to DMT for consideration. • November 2025 – Report to Council to consider approving the policy. • Spring 2026 – Six-month review of implementation. 5.0 CONCLUSION 5.1 The updated DHP policy is essential to ensure compliance with new Scottish Government statutory guidance and to maximise use of the fund in preventing homelessness and alleviating poverty. 5.2 With almost £1m already distributed to local households this year, the DHP fund remains one of the most important tools at the Council’s disposal for sustaining tenancies and supporting vulnerable residents. 5.3 The draft policy has been strengthened by feedback from both citizens with lived experience of poverty and professional partners across Argyll and Bute. The Council will be in a strong position to implement the policy effectively from 26 November 2025. The Council is therefore asked to endorse the retrospective implementation of the Scottish Government’s April 2025 guidance and approve the revised policy framework set out in Appendix 1. 6.0 IMPLICATIONS 6.1 Policy - The revised DHP policy ensures alignment with Scottish Government statutory guidance (effective April 2025) and reflects local stakeholder engagement. It strengthens the Council’s framework for administering the fund and embeds best practice drawn from the national DHP Practitioners Group. 6.2 Financial; In 2025/26, Argyll and Bute’s DHP allocation is £1.323m, with £956,086 already spent or committed as at August 2025. The policy provides the mechanism for distributing this funding effectively. The scheme is fully funded by Scottish Government, but expenditure must be closely monitored to ensure spend remains within allocation limits and maximises benefit for vulnerable households, particularly in mitigating of homelessness. 6.3 Legal: The policy ensures compliance with the Discretionary Housing Payments (Grants) (Scotland) Regulations and the Social Security (Scotland) Act 2018, as well as the Scottish Government’s statutory guidance. There are no new legal risks arising from the policy update. The Scottish Government guidance issued in May 2025 under section 88(1) of the Social Security
Page 5
(Scotland) Act 2018 took effect from 1 April 2025, and the Council’s early implementation ensured full compliance pending formal endorsement of this policy. 6.4 HR: There are no direct HR implications. Existing staff within the Revenues and Benefits Service will continue to administer the scheme on behalf of the Council. 6.5 Customer Service: The revised policy improves accessibility and clarity of the application process, with multiple routes to apply (online, paper, telephone, third party). Citizens Panel feedback has ensured the language is clear and customer-focused, enhancing fairness and transparency. 6.6 Risk: The main risk is that demand exceeds budget allocation. This is mitigated through careful monitoring of spend, prioritisation in line with statutory guidance, and regular reporting to both council management, FIAG and the Child Poverty Action Group and the Scottish Government. Reputational risk is reduced by the Council’s proactive implementation of the April 2025 guidance, ensuring no claimant has been disadvantaged during the interim period. 6.7 Climate Change: There are no direct climate change implications. Indirectly, sustaining households in existing homes helps reduce the environmental impact associated with homelessness and re-housing 6.8 Fairer Scotland Duty: The policy directly addresses socio-economic disadvantage by providing financial support to low-income households facing housing cost shortfalls. It contributes to poverty reduction and supports the Council’s wider anti-poverty objectives. 6.9 Equalities – Protected Characteristics: The policy supports groups with protected characteristics who may be disproportionately affected by housing cost shortfalls, including disabled people, carers, older people, and those experiencing domestic abuse. Reasonable adjustments and accessible formats are available on request. 6.10 Consumer Duty: The Council is committed to providing clear, transparent information about the DHP scheme. The revised policy strengthens accountability and fairness in decision-making, ensuring customers can make informed applications and understand their rights to review. 6.11 Island Communities: The policy applies consistency across all of Argyll and Bute, including island communities where higher living costs, limited housing choice, and transport barriers can increase vulnerability. Delivery will continue to be sensitive to the specific needs of island residents. 6.12 Children’s Rights and Wellbeing: The policy supports children’s rights under the UNCRC, particularly the right to an adequate standard of living (Article 27). By preventing homelessness and sustaining family tenancies, it helps safeguard children’s wellbeing and stability in their home and community.
Page 6
Executive Director Kirsty Flanagan Executive Director with responsibility for Finance Policy Lead Councillor Moreland 1 October 2025 For further information contact: Fergus Walker, Revenues and Benefits Manager Fergus.Walker@argyll-bute.gov.uk Tel: 01586 555237 APPENDICES Appendix 1 – Draft Discretionary Housing Payment Policy
Page 7
APPENDIX 1 ARGYLL AND BUTE COUNCIL FINANCIAL SERVICES DRAFT DISCRETIONARY HOUSING PAYMENT POLICY
Page 8
TABLE OF CONTENTS SECTION NO. SECTION NAME PAGE NO. 1 INTRODUCTION 3 2 POLICY AND OBJECTIVES 3 3 ELIGIBILITY CRITERIA 3 4 APPLICATION PROCESS 4 5 CIRCUMSTANCES WHERE DHP MAY BE PAID 5 6 WHEN DHP WILL NOT BE PAID 6 7 LEVEL AND PERIOD OF AWARD 6 8 DECISION MAKING PROCESS 6 9 NOTIFICATION AND REVIEW PROCESS 7 10 PAYMENT METHODS 7 11 CHANGES IN CIRCUMSTANCES 8 12 FRAUD PREVENTION AND OVERPAYMENTS 8 13 MONITORING AND REPORTING 8 14 PUBLICITY AND AWARENESS 8 15 POLICY REVIEW 8
Page 9
1. Introduction Discretionary Housing Payments (DHPs) are financial contributions made by Argyll and Bute Council to help individuals with their housing costs, where the rent or housing costs are not fully met by Housing Benefit or Universal Credit. DHPs are not a form of Housing Benefit but are intended to provide additional support to prevent hardship. The DHP scheme is funded by the Scottish Government and operates within the Scottish DHP Guidance manual, most recently updated issued in May 2025. The aim of this policy is to outline how DHPs will be allocated and managed, ensuring fair and transparent decision-making across Argyll and Bute. The amount that can be paid out by Argyll and Bute Council (or any other local authority) is cash-limited each year by the Scottish Government. This cash limit is equivalent to two and a half times the government contribution to the fund. The Council is breaking the law as per Article 7 of The Discretionary Housing Payment (Grants) Order 2001 if they award payments above this limit. 2. Policy Aims and Objectives The primary aims of Argyll and Bute Council’s DHP policy are: • Preventing homelessness and assisting with housing costs. • Alleviating poverty and reducing hardship. • Sustaining tenancies and supporting vulnerable individuals. • Encouraging and supporting employment and self-sufficiency. • Supporting foster carers, disabled tenants in adapted homes, and young people transitioning from care and into adult life. • Keeping families together • Supporting victims of domestic violence who are trying to move to a place of safety The policy also seeks to: • Support the work of voluntary agencies and social landlords, ensuring a collaborative and holistic approach. • Encourage tenants to access money management advice and welfare support. 3. Eligibility Criteria To be eligible for a DHP, applicants must: • Be in receipt of Housing Benefit or Universal Credit that includes the housing costs element; and • Have a current rental liability. In addition, applicants will normally be considered where their housing costs are not fully covered by benefit and they are unable to meet the shortfall from income or savings. These examples are not rigid tests — each case will be considered on its individual circumstances, and applicants do not need to meet every example to be eligible.
Page 10
DHPs cannot be awarded to homeowners, as they are only available where there is an eligible rent liability. 4. Application Process The Council seeks to ensure that the DHP application process is accessible and straightforward, in line with Scottish Government guidelines. Under these guidelines the Council does not require an application form to apply for Removal of Spare Room Subsidy DHP or Benefit Cap DHP. A completed application form is required for all other categories of DHP. Claimants can apply in several ways, and all applications will be treated fairly and on a case-by- case basis. How to Apply • Online Application: Claimants can complete the DHP application form online through the Council’s website. The form allows for the submission of required information and supporting evidence electronically. [Weblink to new form to be added] • Paper Application: Paper forms are available at Council offices or can be sent by post. Forms can also be downloaded and printed from the Council’s website: Discretionary Housing Payments | Argyll and Bute Council (argyll- bute.gov.uk) • Telephone Application: Claimants can apply by telephone by contacting the Benefits Service on 01546 605512. An officer will assist in completing the application over the phone, ensuring all required details are recorded. • Third-Party Applications: A third party, such as a family member, advocate, or welfare adviser, may submit an application on behalf of the claimant with their consent, particularly where the claimant is vulnerable or needs assistance. Required Information To assess a DHP application, the following information is normally required: • Rent Liability: proof of the claimant’s rent, including any breakdown of service charges; • Income and Expenditure: full details of all household income and outgoings; • Benefit Entitlement: evidence of Housing Benefit or Universal Credit (housing cost element) entitlement; • Supporting Documents: evidence relevant to the application, such as proof of disability, medical or hospital letters, or letters relating to homelessness or domestic abuse. The Council recognises that obtaining medical evidence can be costly. Applicants will not normally be asked to pay for GP letters. Alternative evidence such as Personal Independence Payment (PIP) / Adult Disability Payment (ADP) award letters, hospital appointment letters, or supporting statements from social workers, support workers, or advice agencies will be accepted.
Page 11
The Council will accept documents digitally, by post, or in person. If any documentation is missing, claimants will be notified and given sufficient time to provide it. Support with completing applications, including language or interpretation support, is available on request. 5. Circumstances Where DHP May Be Paid The following examples illustrate circumstances where a DHP may be awarded. They do not replace the eligibility rules in Section 3 but highlight the types of situations the Council will prioritise. Awards will always be considered on a case-by- case basis. Examples include: • Where the claimant or a household member is chronically sick or disabled • Households affected by the Benefit Cap or the Removal of Spare Room Subsidy (Bedroom Tax) • Tenants facing shortfalls due to Local Housing Allowance (LHA) restrictions • Where rent becomes unaffordable due to a change in household circumstances, such as separation or loss of employment • Support for foster carers or kinship carers in need of additional space • Backdated DHPs for rent arrears where a claimant has been unaware of their eligibility • Consideration for domestic abuse victims moving to a place of safety • Support for young people transitioning from care to independent living • Prioritisation of tenants with disabilities living in adapted properties Universal Credit Housing Costs and Tenancy Overlaps Where a claimant is entitled to Universal Credit including the Housing Costs element, but due to the way UC assessment periods operate they have accrued unavoidable rent liability at a previous tenancy, the Council may consider awarding a DHP. Awards will only be considered where: • The overlap could not reasonably have been avoided (e.g. held-to-notice, waiting for property readiness) • The claimant provides evidence of both tenancies and their UC housing costs award • The period covered will not normally exceed 4 weeks For the avoidance of doubt, any such award is made in respect of the claimant’s entitlement to UC Housing Costs, and is intended to prevent hardship and homelessness arising from the transition between tenancies. Additional vulnerable groups The Council will also give particular consideration to vulnerable groups, including: • people with learning disabilities or neurological conditions • unpaid carers
Page 12
• older people on low incomes near benefit thresholds • refugees and those with limited English language skills • people awaiting diagnosis where there is evidence of significant medical need 6. When DHP Will Not Be Paid DHPs will not be paid under the following circumstances: • Where a tenancy was not affordable at the start (unless exceptional circumstances exist). • Where there is benefit fraud or sanctions in place. • For ineligible service charges such as utilities or meals. • For rent arrears caused by overpayment recovery or sanctions. • For costs associated with Council Tax (separate from housing costs). The Council will advise claimants who are not accessing other available benefits, encouraging them to apply for entitlements and to seek financial advice from appropriate services. 7. Level and Period of Award The level and duration of a DHP award will depend on the individual circumstances of the claimant and their household. Awards may be made as: • One-off payments, such as rent in advance, rent deposit, or removal costs • Ongoing short-term support to cover rent shortfalls or other housing costs • Backdated payments (up to a maximum of 12 months) to help address rent arrears Payments will not exceed the claimant’s weekly eligible rent amount. Ongoing awards will normally be reviewed every 3 to 6 months to check whether the claimant’s circumstances have changed. This approach helps balance immediate crisis support with longer-term tenancy sustainability. 8. Decision-Making Process All decisions will be made by a designated officer within the Benefits Team. Where appropriate, they will collaborate with other services such as: • The Council’s Housing Services team • The Council’s Welfare Rights team • The Council’s Employability team • Representatives from a Registered Social Landlord (e.g. ACHA, Fyne Homes, West Highland Housing Association, Dunbritton Housing Association) • Bute Advice Centre • Argyll and Bute Citizens Advice Bureau When considering an application, the following factors will be taken into account: • The claimant’s personal circumstances, including medical needs and household composition
Page 13
• The income and expenditure of the household (income from Disability Living Allowance (DLA) / Personal Independence Payments (PIP) mobility component will be disregarded for the purpose of financial assessment) • The level of debt and whether steps have been taken to address it • Any savings or capital that could be used to cover housing costs • The tenancy, the prevention of homelessness, and the availability of alternative housing or options to reduce rent • The long-term sustainability of the household’s housing situation, including advice on debt management, employment support, and other measures to improve financial resilience • Whether the claimant has reduced non-essential expenditure, such as luxury goods or high entertainment costs, in order to prioritise housing Decisions on DHP applications will normally be made within 14 days of receipt of all required supporting evidence. Where evidence is outstanding, applicants will be notified and given reasonable time to provide it before a decision can be made. A “social landlord” refers to a registered housing association or local authority landlord. Although Argyll and Bute Council does not own general housing stock, it may act as a landlord where temporary accommodation is provided through the homelessness service. Decisions are made by the Council’s Benefits Team, with complex cases discussed with Housing Services and Welfare Rights staff. 9. Notification and Review Process All applicants will be notified of the outcome of their DHP application in writing by letter or email within 14 days of the decision. Where a DHP is awarded, the notification will include: • The amount awarded and the period of payment. • Any conditions attached to the award, such as engaging with support services, welfare rights or third sector support agencies such as Bute Advice Centre or Argyll and Bute Citizens Advice Bureau. • Details of how, when and to whom the award will be made and the requirement for the claimant to report any changes in the circumstances should they take place. • The Council will provide a two-tier review process: • First review: A team leader not involved in the original decision will review the case. • Second review: If the applicant is still dissatisfied, they may request a final review by a senior management. 10. Payment Methods Payments will be made directly to the claimant’s rent account, landlord, or bank account. The frequency of payment will be in line with the payment of Housing Benefit. Claimants in receipt of Universal Credit they will be paid on the 10th of each month.
Page 14
Lump sum payments for rent deposits or advance rent may be made directly to the new landlord or agent. 11. Changes in Circumstances Claimants are required to notify the Council immediately of any changes in their circumstances, such as a change in income, household composition, or rent liability. DHPs will be reviewed, and payments adjusted where necessary. 12. Fraud Prevention and Overpayments If a claimant is found to have received a DHP due to fraud or misrepresentation, the Council will seek to recover the overpayment. Fraudulent claims may lead to criminal investigation. 13. Monitoring and Reporting The Council will monitor the DHP fund on a monthly basis to ensure it is being used effectively to support those in greatest need. Regular reports will be made to the Revenue and Benefits Manager and Financial Services Management Team to ensure transparency and budget control. Regular reporting will track spending, the number of claims awarded, and the outcomes, such as preventing homelessness or sustaining tenancies. Reports are also submitted monthly to the Scottish Government for monitoring purposes in conjunction with a formal Mid-Year expenditure estimate and a report at the end of the year. These figures are published by the Scottish Government annually. The Council will use this data to adjust policies or prioritise funding if necessary, ensuring flexibility in responding to changing needs. 14. Publicity and Awareness The Council will actively promote the availability of DHP through a range of channels, including the Council website, printed leaflets, and collaboration with voluntary organisations. Social landlords and support agencies will also be encouraged to refer individuals for DHP. The policy and application form will be available in alternative formats on request, including large print, Easy Read, and community languages. Interpretation and translation support will be provided where needed. Applicants who do not have IT skills can apply by phone or paper form. Contact details for the Benefits Service will be clearly displayed in all publicity materials. Applicants who are not awarded a DHP will be directed to other forms of help, such as the Scottish Welfare Fund, local advice agencies, Citizens Advice Bureau, and social landlord tenancy sustainment services. 15. Policy Review This policy will be reviewed annually, or sooner if required, to reflect any changes in legislation, funding, or priorities. Any significant changes will be presented to the Council for approval. Revenue and Benefits Manager 1 October 2025