Appendix 4 - Ealing Council. Discretionary Housing Payment Scheme

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1 Appendix 4 - Ealing Council Discretionary Housing Payment Scheme Introduction The government s Department of Work and Pensions (DWP) provides funding to Local Authorities in the form of a Discretionary Housing Payment (DHP) allocation to facilitate them in helping tenants who they consider are vulnerable or most in need of financial assistance. Recognising the impact of changes as a result of the Welfare Reform Act 2012 on those claiming Housing Benefit, and in subsequent years Universal Credit, the DWP has increased the amount of DHP funding available to local authorities. The increased level of funding, however, is significantly less than the reductions that will be made by the Welfare Reform. The DWP funding for Ealing for 2013/14 has been increased to 3.1 million to allow for the Welfare Benefit Cap, the Social Rented Sector Size Criteria (`bedroom tax`) and Local Housing Allowance Reforms. Based on figures available in January 2013, the reduction in the amount of housing benefit payable due to the Benefit Cap for Ealing alone is an annualised figure of more than 24 million The funding must, therefore, be directed at those considered to be most in need and to motivate those who are able to take steps to reduce their reliance on state benefits. What are Discretionary Housing Payments? A local authority can make Discretionary Housing Payments (DHPs) to customers in addition to any Housing Benefit or Universal Credit which includes a housing element they receive, when it is satisfied that a customer is in need of further financial help with housing costs. The scheme is subject to the following constraints: Payment is discretionary; there is no statutory right to a payment. The amount available to the local authority is cash limited in any financial year by the Secretary of State for the Department of Works and Pensions. The local authority determines how to operate the scheme A DHP award can only be considered for a period during which the customer is or was entitled to the minimum Housing Benefit award. Who can get Discretionary Housing Payments? 1

2 DHPs are not awards of Housing Benefit; they can only be awarded if the customer already receives Housing Benefit or a housing cost element within Universal Credit. The DHP scheme will be targeted at individuals falling into the following categories that the council considers need additional help with housing costs (rental only but including eligible service charges paid under to shared ownership homes). Support for vulnerable groups where moving is not a realistic option Short term assistance Supporting those in work and those looking for work Supporting education and training Assistance with securing sustainable tenancies Other circumstances which do not come under the other headings above Consultation Ealing Council invited comments or suggestions on the draft Discretionary Housing Payments Scheme from residents of the borough as well as other relevant stakeholders such as private and social landlords and community and voluntary organisations. The consultation ran for a 3 week period ending 30/06/2013. Feedback received from the consultation was taken into account in formulating this policy. 2

3 Contents Policy Aims... 4 Guiding principles and features of the DHP Scheme... 4 Strategic objectives... 4 Reasons for making an award... 5 What DHPs cannot cover... 6 Criteria for providing DHP support Support for vulnerable persons in unsustainable tenancies where moving is not a realistic option Short term assistance Supporting those in work and those looking for work Supporting education and training Assistance with securing new sustainable tenancies Other Circumstances not covered by other categories Assessment of DHP applications Qualifying criteria Application process Decision making Making a claim in advance Notifications of decisions Reviews Change in circumstances Payments Overpayments Fraud Publicity Debt advice Policy review

4 Policy Aims The objective in allocation of Discretionary Housing Payments (DHPs) is that the payments help contribute to the Council s aims for the development of the borough and promote social and financial inclusion for its residents. Discretionary Housing Payments are not intended to subsidise poor, inappropriate accommodation or to keep people in homes where they will not be able to maintain rent payments at the current rate. The Benefits Service is committed to working with other departments within the council and the wider community such as the voluntary sector and social landlords to provide an inclusive approach to addressing financial difficulties. This DHP policy aims: To help those who have limited options for moving to alternative accommodation, where their housing costs are not met in full by their welfare benefits. To provide one off or temporary assistance to enable those whose best option is to move into more sustainable/affordable tenancies. To help those taking steps to help themselves such as those moving into employment, increasing the number of hours worked or, education or training. Guiding principles and features of the DHP Scheme This DHP scheme will be based upon Ealing Council s corporate strategy, the DWP s guidance for 2013/14 and consultation with stakeholders. Strategic objectives Preventing homelessness. Assisting people to secure new sustainable tenancies. Providing financial help for people in short term difficulty. Providing financial incentives for people to take up or stay in work. Supporting people in education/training. Keeping families together. A sustainable tenancy is a situation in which the resident will be able to continue to pay their rent and therefore remain in the same home. An unsustainable tenancy is a situation in which the resident will not be able to continue to pay their rent without continued assistance and therefore be required to find an alternative home. 4

5 In order to realise these objectives it is important that a process is put in place that is simple to follow for both potential customers and decision makers. The DHP scheme is intended to be: Accessible All tenants can apply for DHPs - applications will be means-tested and take into account personal and financial circumstances and considerations of equality. Reason based All of the options open to the claimant (including reducing household expenditure, maximising income, securing employment, moving to alternative less expensive accommodation) will be taken into account when assessing an application. The reasons for each DHP decision must be recorded and based upon the information provided as part of the application together with information held on the Housing Benefit claim. Consistent/Fair All claimants will be treated fairly. DHP decisions should be consistent and made in accordance with the schemes principles and award criteria. Monitored To ensure the objectives of the scheme are met and to establish levels of take up against the identified priorities. Reasons for making an award Examples of the shortfall that DHPs can be used to cover The council is not required to spend all of its allocation or spend it in a particular way. Any unspent DHP funding will have to be returned to DWP at the end of the financial year. Examples of the types of shortfall that DHPs can cover include: Reductions in Housing Benefit or the housing component of Universal Credit caused by a Welfare benefit cap. Reductions in Housing Benefit or the housing component of Universal Credit resulting from the under occupation of rented social housing. Reductions in Housing Benefit or the housing component of Universal Credit caused by a Local Housing Allowance restriction, including the shared accommodation/room rate and rent officer restrictions. Reductions in Housing Benefit or the housing component of Universal Credit resulting from non-dependant deductions or the use of income tapers. 5

6 What DHPs cannot cover The DHP regulations do not allow payments to be made to help with the following charges if included in a customer s rent: Ineligible service charges; Increases in rent to cover outstanding rent arrears; and Certain sanctions and reductions in Benefit. 6

7 Criteria for providing DHP support The DHP scheme will be targeted at individuals falling into the following categories that the council considers need additional help with housing costs (rental only but including eligible service charges paid under a shared ownership tenancy). 1. Support for vulnerable groups where moving is not a realistic option 2. Short term assistance 3. Supporting those in work and those looking for work 4. Supporting education and training 5. Assistance with securing sustainable tenancies 6. Other circumstances which do not come under the other headings above Each category is outlined below with typical examples. The examples are not exhaustive and due consideration will be given to personal and financial circumstances that are not specifically detailed in the Policy. Applications for DHPs are not limited to these categories which cover the most frequently occurring situations. Awards cannot be guaranteed for someone falling into a category without also taking into account their personal and financial circumstances. 1. Support for vulnerable persons in unsustainable tenancies where moving is not a realistic option This category is to help vulnerable people continue to live in homes they will be unable to pay for without short or long term assistance. Awards will be considered for up to 52 weeks in any financial year. Vulnerable persons under this category include: Tenants who have reached state pension credit age. Tenants with children in the household under 5 years of age. Tenants with foster children in the household. Tenants or household members who are in receipt (or underlying receipt) of any disability premium or disability benefit. Tenants who have shared parenting responsibilities for children. Carers Tenants or family members with mental health related issues. 7

8 The tenant must have a need to continue living in that property which in the authority s opinion is reasonable such as: Having friends, relatives or a local support network that they would not have access to if they had to move. Living close to medical or support services (Social and community services) which in the opinion of the authority are necessary for day to day living. Living in a property which has been substantially adapted for a disabled member of the household. Child Protection: Families that need to move to lower cost accommodation but are unable to do so immediately because of issue related to child protection. Examples include: Size Criteria: where there is a benefit shortfall connected with the presence of foster children in the household. Adapted property: where there is a benefit shortfall in respect of properties which have been significantly adapted for a household member on disability grounds and there are no suitable alternative properties. Illness: This could be long term or terminal illness. 2. Short term assistance This category is intended to give short term assistance to tenants to help them through a temporary situation or provide them with time to resolve a problem. A Unsustainable tenancies regular short-term awards up to 9 months. A DHP for an otherwise unsustainable tenancy may be awarded if, in the authority s opinion, it is reasonable for a tenant to continue living there in the short term and it is likely that a change in the tenant s circumstances will soon allow them to remain at the property without needing DHPs. The change must be expected to occur within a reasonable time period not usually exceeding 6 months. Possible examples are: Significant birthdays: Where an additional bedroom will be required under the Housing Benefit size criteria in the private or social rented sectors following a dependent child reaching a significant birthday. This would include a claimant or partner reaching State Pension Credit age. 8

9 Spare bedroom(s): (i) A tenant with a spare bedroom which it is expected will be occupied by a relative, friend, border/lodger, or subtenant. Written evidence required from the person who will be moving in or proof of advertising for a lodger. (ii) Social Sector tenants with a spare room(s) that do not want to find someone to occupy the spare room(s) can apply for a DHP to assist with any shortfall provided they have requested their landlord for a transfer to a smaller property. Pregnancy: Where the tenant or a member of the tenant s household is pregnant and an additional bedroom will be required under the Housing Benefit size criteria in the private or social rented sectors following the birth of a child DHP assistance can cover the shortfall relating to the additional bedroom until the child is born. B Unsustainable tenancies regular short-term awards up to 17 weeks A DHP for an otherwise unsustainable tenancy may be awarded if, in the authority s opinion, it is reasonable for a tenant to continue living there in the short term whilst seeking alternative accommodation. The tenant must be expected to move within a reasonable time period defined as within 13 weeks of the tenancy becoming unsustainable and is not looking for ways of making the present tenancy sustainable. Possible examples are: Private sector Accommodation that is too large The tenant is living in a property that is larger than allowed for under the housing benefit regulations but does not want to take in a lodger but is looking for alternative accommodation. Accommodation exceeds LHA levels Tenants living in accommodation that is significantly above the LHA valuation for the property size or locality. C One off awards/short term awards to alleviate short term situations Where a short term difficulty has or is causing problems in meeting housing costs an award to cover some or the entire shortfall can be considered. Examples could include: Priority debt Tenants who have an unavoidable debt which has left them unable to meet their rent in the short term may be considered for a DHP, provided that such costs cannot be met by the DWP or the council s Local Welfare Assistance Scheme. 9

10 Such expenditure could relate to an unusually high utility bill following a cold spell and certain payments ordered by the courts. DHP awards for these cases are most likely to be one off payments. Unplanned expenditure Tenants who have had to cover an unavoidable one off cost which has left them unable to meet their rent in the short term may be considered for a DHP, provided that such costs cannot be met by the DWP or the council s Local Welfare Assistance. Such expenditure could relate to funeral expenses including the cost of or travel to funerals in the UK, theft of savings, or a car repair. DHP awards for these cases are most likely to be one off payments. 3. Supporting those in work and those looking for work This category is aimed at keeping people in work, encouraging those in work to increase the hours they work and to encourage those able to work to look for work. Examples of possible support include: Child Care Costs The maximum childcare costs disregard permitted under the Housing Benefit regulations for one child has been frozen at 175 per week and for 2 or more children at 300 per week for many years and has not kept pace with child minding costs. For those moving into work with: One child DHP awards can be made to the extent that their child care costs exceed 175 per week up to a maximum of 25 per week, for a period not exceeding 26 weeks. Two or more children DHP awards can be made to the extent that their child care costs exceed 300 per week up to a maximum of 50 per week, for a period not exceeding 26 weeks. The DHP awards cannot be higher than the difference between the statutory Housing Benefit childcare disregard and the total childcare costs on a weekly basis. To be eligible to the childcare disregard the claimant must: 10

11 Already be paying child care costs which meet the definition of `relevant childcare costs as defined within the housing benefit or replacement regulations. There must be one or more children that the claimant is paying relevant childcare costs for. The child care costs must exceed 175 per week in the case of one child, 300 per week for two or more children. Travel Costs Travel costs may be a significant factor for the sustainability of those in work or looking for work. In some situations the cost of travel to work (which is not already allowed for in the Housing Benefit regulations) may make certain jobs economically unviable. Customers who cannot meet their rent liability and travel costs can apply for a DHP award. A regular DHP payment towards fares or fuel costs for a period not exceeding 26 weeks may enable an individual to retain or take up a job and prevent them from being subject to other restrictions such as the Welfare Benefit cap. DHP will normally award up to 25 per week towards travel costs. Larger claims can be made although these claims will the capped at no more than half of a claimant s weekly travel costs. Extended Payment enhancement As an incentive to start work, tenants who qualify for an Extended Payment can apply for an Additional Extended Payment in the form of a one off DHP payment. The Additional Extended award will be capped at 25 per week. Alternatively the award may be capped at value of the difference between the Housing Benefit award and the maximum eligible rent. This is calculated in the first benefit week following the end of the statutory Extended Payment period. In that instance the payment could last for up to four weeks only. The job must be expected to last for a minimum of 8 weeks and changes of circumstances that take place during the statutory Extended Payment period will be taken into account when calculating the Additional Extended Payment. 4. Supporting education and training This category supports claimants, partners or family members who are undertaking education / training. This training should, in the council s opinion, enhance a family s 11

12 ability to obtain, retain or improve employment prospects. Claims may also be made to help allow a family member to complete a critical point in their education / training e.g. GCSE year, final year of A levels, final exams, NVQ and other vocational training. Help can be considered towards a shortfall in the rent on the grounds that moving would, in the council s opinion, be detrimental to the educational outcome of a family member. A DHP award can also be made to help with the cost of travel to the educational / training establishment. Assistance in both cases will not extend beyond one month after the end of the academic year in which the critical point occurs. 5. Assistance with securing new sustainable tenancies Customers who are unable to remain in the current homes and who have found alternative accommodation, either in or outside of the borough, can apply for a one off DHP. The following costs can be considered: Removal Costs Assistance with some or all of actual invoiced/receipted cost. Deposits These can be paid to secure a sustainable tenancy where the tenant does not have access to sufficient funds to cover a deposit. Some agents charge an administration fee these will not be met by DHPs. Deposits can be paid for properties in or outside the borough. Rent in Advance Some tenants are required to pay rent in advance as well as a deposit. Payment for rent in advance can be made if it is the only way that a tenant can secure a tenancy. DHP application for deposits and rent in advance will be determined in advance of the claimant moving in and payments made direct to the new Landlord/agent. Confirmation that the tenant has moved in and a tenancy agreement signed by both landlord and tenant is required before a DHP can be awarded. In order that a tenant can secure a tenancy, when a favourable decision is made the tenant will receive a written decision notice advising them that their application has been approved. The tenant should show their prospective landlord the decision notice confirming that they have secured DHP funding for a deposit/rent in advance. The DHP award will be paid 12

13 to their landlord following receipt of a tenancy agreement signed by both parties and confirmation that the tenant has moved in. To be considered sustainable the new tenancy has to be of an appropriate size for the customer s household and secured for a rental which is no more than the LHA Allowance for the area in which it is located. Alternatively the customer must be able to demonstrate that they will be able to cover any shortfall of rent not covered by Housing Benefit where a rent exceeds the LHA valuation. Customers wishing to claim assistance with removal costs are advised to provide an estimate at the time of requesting assistance. An initial decision on an award can be made based upon the estimate and payment will be made to the customer following production of a receipt or invoice for the full cost of the removal. DHP awards for removal costs limited to amounts that the authority considers reasonable will be paid direct to customers. 6. Other Circumstances not covered by other categories In situations where tenants are faced with expenditure which in the authority s opinion is reasonably incurred or practically unavoidable, DHPs may be considered to avoid rent arrears accruing. Examples include: Non dependant deductions A DHP award may be considered in instances where a non-dependant is not contributing an amount equivalent to the non-dependant deduction being made in respect of the claimant s Housing Benefit award. The Benefits Service has to be satisfied that there is a genuine reason why the non-dependant is not contributing an amount equivalent to the deduction being made. Evidence of why the non-dependant cannot or will not cover the cost of the non-dependant charge is required. For example, where a non-dependant does not contribute due to a payment of court charges, evidence of these court charges may be requested. Also, in cases where there is a history of domestic violence a police report may be required. Short term illness/visiting/looking after sick friends or family Temporary accommodation costs and or travel costs incurred by a tenant in connection with their own health needs. Temporary accommodation costs and or travel costs associated with visiting or assisting with the convalescence of an ill friend or family member. 13

14 Prison visiting Costs incurred in connection with temporary accommodation and or travel costs to visit family members in prison. 14

15 Assessment of DHP applications Qualifying criteria In order to qualify for a DHP award qualifying criteria will have to be met. Some criteria are statutory as detailed within the Discretionary Financial Assistance regulations 2001 which cover all award types and others are dependent upon the category the award falls under. To receive a DHP award an applicant must: Be in receipt of Housing Benefit from Ealing council for the relevant period Be in receipt of the housing component of Universal Credit and liable for rent in Ealing Borough or liable to pay rent to Ealing council. Application process Applications for DHPs should be made using the online web based Local Welfare Assistance form, which also provides the opportunity to apply for other types of discretionary funding. The form can be completed by customers in their home, in libraries, by using the selfservice terminals in the Customer Services Centre or any location with access to the internet. Customers can also make an appointment to complete an application form with a Customer Services member of staff. On occasion this may be done at the same time as the application for Housing Benefit is made. Customers who are not online at home and are unable to travel e.g. due to infirmity or caring responsibilities, will be assisted via a home visit or telephone interview. Decision making Decisions on DHP applications will be made using the information provided by applicants together with that already held on file. The reasons for each decision will be recorded. Decisions will be made in accordance with the schemes objectives, the DHP regulations (Discretionary Financial Assistance regulations 2001) and DWP guidance to ensure a consistent approach to each application. The Local Welfare Assistance team will process requests for Discretionary Housing Payments and will work with the Housing Department regarding recommendations/ referrals where a quick decision is needed to secure new tenancies 15

16 When the Council has considered the claimant s needs and circumstances, it will decide how much to award. This may be nothing, or any amount below the difference between the rental liability and payment for Housing Benefit / Universal Credit. Regular DHP awards cannot exceed the weekly eligible rent for the claimant s home The award of a DHP does not guarantee that a further award will be made at a later date, even if the claimant s circumstances remain unchanged Because DHPs are discretionary in nature there are no appeal rights but in the interests of fairness and consistency, customers who are dissatisfied with a DHP decision can apply for a revision of the decision. Reports will be run for the purposes of monitoring and analysing take up. When deciding whether or not to award a DHP, each application will be assessed on its merits, the objectives of this policy and equality considerations and factors such as: If placed by another authority, have lived in Ealing Borough for more than 2 years (subject to Ealing council s discretion and the personal and financial circumstances of the customer). Having capital of less than 8,000. The size of any shortfall between the claimant s eligible housing costs and the amount of their Housing Benefit or Universal Credit award and the reasons for the shortfall. The financial circumstances (income and expenditure, savings, capital, amount and type of debts) of those living in the claimant s household; Any special needs or health and social problems that the claimant and/or their family have, and what likely impact these have on their housing and financial situation; The impact that moving home and/or changing schools is likely to have on the family and the educational outcomes of anyone in the household; The reasons why, compared to other people, the circumstances of the claimant and their family merit them to be considered for a DHP award; The impact that not awarding a DHP is likely to have on the Council s finances and services, especially homelessness, social care, family support and health; The length of time for which a DHP is being sought; Any steps the claimant has taken to reduce their rental liability; The nature of any contact the claimant has had with the Council regarding the impact of Welfare Reform; The amount of money remaining in the DHP budget; and Any other factors that the Council and/or claimant consider appropriate. The Council will not normally take into account any financial loss resulting from the claimant s failure to claim any benefits in a timely manner. No allowance 16

17 will be made, either, for any debt relating to an overpayment of Housing Benefit. Making a claim in advance A DHP can only help with eligible housing costs for a period when the claimant is entitled to Housing Benefit or Universal Credit. A claim for DHP can be made in advance of an anticipated change in the customer s situation. For example if a household member is permanently leaving the home and this will affect the number of bedrooms required or the introduction of a Welfare Benefit Cap. Notifications of decisions The claimant will be notified of the outcome of their DHP application in writing. If the application is successful the tenant (and the landlord if the DHP is to be paid to the landlord) will be notified. DHP claim will be processed within 14 days of receipt of the claim and all supporting documentation, or as soon as possible after that. The notification will include the following details: The reason for the award; The amount of the award; The period of the award; Who the DHP payment will be made to; The claimant s duty to report any change in the household s circumstances which could affect their entitlement to or amount of a DHP award. Claimants will also be advised of the council s Local Welfare Assistance Scheme. Reviews If an applicant is unhappy with the decision he can ask for a review within one month of being notified of the decision. The application together with supporting documents will be looked at again and a further decision will be notified in writing within a reasonable period of time.. 17

18 Change in circumstances Claimants must report any changes in their circumstances to the Benefit s Service when receiving a DHP payment. Examples of changes that must be reported include: Change of address Any changes to the tenancy including any rent increases Any change in the circumstance of a non-dependant who normally lives with the applicant Any absence from home which is expected to exceed 13 weeks Any changes in savings and investments The DHP award may be revised or stopped following a reassessment to take account of any changes. Payments Payment of DHPs will generally be made to whoever the Housing Benefit or Universal Credit award is paid to. DHPs for rent in advance and deposits will normally be made direct to the landlord. Frequency of discretionary housing payments depends on frequency of housing benefit payments. Payments of DHPs are subject to applicants agreeing with any terms and conditions associated with the award and providing all the information required of them and also meeting any other conditionality applied to any other discretionary awards. The reason for requesting a DHP payment should not has already been met by a payment from the DWP s Social Fund, Ealing council s Local Welfare Assistance Scheme, or Ealing council s Housing Department for the same period. Overpayments If a DHP overpayment occurs the council will decide whether to recover it or not. If it is decided that recovery action is to be taken the council will provide a written explanation of the reason for the overpayment, the period and the amounts involved. Overpayment recovery will be sought by sending an invoice to the person who was paid the DHP and will not be recovered from payments of HB or UC. Fraud The council is committed to preventing and identifying fraud. If a claimant makes a fraudulent claim for a DHP by making a false declaration or providing false or inaccurate evidence or statements, they may have committed an 18

19 offence under the Theft Act Suspected fraud will be investigated and this may lead to criminal proceedings. Publicity In order that the scheme meets its objectives it is important that the availability of DHPs is made known to as wide an audience as possible, including existing and potential housing benefit customers as well as both social and private landlords and advice agencies. Website The housing benefit pages of the council s website will detail the availability of DHP awards together with other discretionary awards available to residents. A link to the online discretionary eclaim will be provided in these pages. Eclaim and award notices The housing benefit eclaim and housing benefit award notices make reference to the DHP scheme. Targeted mail shots These will be used to notify customers who in the authorities opinion may be in need of further help with housing costs. Around Ealing Magazine Discretionary awards including DHPs will be featured in the council s magazine. Locata There is a link on the council s Locata web page to the Benefits Service DHP web page Debt advice Anyone who appears to be experiencing debt related issues will be referred to the Local Welfare Assistance team for advice. Policy review This policy will be reviewed in light of any legislative changes, trends or other factors that impact on its effectiveness, and in any event every 3 years. The council may also consider if it should allocate any of its own resources towards the DHP budget, to alleviate the extent of the Welfare Reform on vulnerable residents. 19