Discretionary Housing Payments

Published Monday, July 6, 2015

This note explains the funding position and considers evidence on how Discretionary Housing Payments (DHPs) are allocated by local authorities.

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What are DHPs?

Where a claimant is eligible for Housing Benefit but experiences a shortfall between the rent due and the Housing Benefit payable (e.g. because they live in a property that is deemed to be too large for their needs, or the rent charged is higher than the Local Housing Allowance rate) they can apply to the local authority for a Discretionary Housing Payment (DHP). 

There is no obligation on authorities to pay DHPs. The Department for Work and Pensions (DWP) has issued guidance for authorities (updated in April 2014) but the method of allocation adopted and decision making process lies with local authorities.

Funding DHPs

Increasing the level of funding for DHPs was one of the ways in which the Coalition Government sought to mitigate the impact of some of the reductions to Housing Benefit entitlement introduced between 2010 and 2015. These reductions included the under-occupation deduction for working-age claimants in social housing (also referred to as the ‘Removal of the Spare Room Subsidy’ or ‘bedroom tax’), the household Benefit Cap and reforms to the Local Housing Allowance (for claimants in private rented housing). Both the Scottish and Welsh Governments took steps to increase DHP funding. Measures in the Scotland Bill will give the Scottish Parliament legislative competence to develop its own DHP scheme.

Alongside the announcement of further cuts to Housing Benefit entitlement as part of Summer Budget 2015, the Chancellor said that £800m would be made available for DHPs over the next five years.

Inconsistent use of DHPs?

Evidence on the use of DHPs has raised questions around the adoption of different practices by local authorities – leading to allegations of a ‘postcode lottery.’  There are references to disabled tenants (particularly those living in adapted properties) struggling to access DHPs in some areas, coupled with issues around the need to submit repeat applications and the consequent uncertainty and anxiety associated with this.  The adequacy of the overall level of DHP funding has also been questioned.

Other relevant Library briefing papers

Information on the implementation of the under-occupation deduction from Housing Benefit in social housing can be found in Library briefing paper 06272, Under-occupation of social housing: Housing Benefit entitlement. A further briefing paper considers evidence on the impact of the under-occupation deduction: 06896, The impact of the under-occupation deduction from Housing Benefit (social rented housing).

Commons Briefing papers SN06899

Author: Wendy Wilson

Topics: Housing, Housing benefits, Private rented housing, Social rented housing

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