DISCRETIONARY HOUSING PAYMENTS by Desmond Rutledge Barrister at Garden Court Chambers Prepared for CPAG Seminar: 26 March 2014 Localised Welfare: How to challenge unlawful schemes
Contents 1. Outline of the DHP scheme 2. The policy aims of the DP scheme 3. Public law and the DHP scheme 4. Potential challenges
SECTION ONE: Outline of the DHP scheme The statutory framework Sections 69-70 of the Child Support, Pensions and Social Security Act 2000 The Discretionary Financial Assistance Regulations 2001 (SI 2001/1167) The Discretionary Housing Payment (Grants) Order 2001 (SI 2001/2340) contains details of the funding of the scheme.
The Policy Documents Discretionary Housing Payments Guidance Manual - Including Local Authority Good Practice Guide (April 2013) issued by DWP. Each LA has its own policy document Summary in MA and Others?
Funding the DHP scheme DWP allocates funds to LAs to support the payment of DHPs - cash limited LA is able to supplement the DHP budget from its general funds so long as it does not exceed the overall cash limit.
Welfare Reform & DHPs removal of the 5-bed Local Housing Allowance ( LHA ) rate cap on property size LHA rates (April 2011) restriction of LHA rates to the 30th percentile rather than the median (April 2011) above inflation increases in nondependant deductions (2011 to 2014)
HB Cuts cont. extension of the shared room LHA rate for single people aged <35 (Jan 2012) introduction of size criteria for the social sector ( the bedroom tax ) (April 2013) benefit cap (mid-2013) planned below inflation increases in LHA rates and welfare benefit amounts.
Funding of DHPs Funding for DHPs have increased from 20m in 2010-11 to 30m in 2011-12 60m in 2012-13 150 in 2013/14 due to: introduction of the benefit cap ( 65); bedroom tax ( 30); LHA reforms ( 40). Remaining 20 for other uses.
Who can claim DHPs? The basic conditions for being eligible for a DHP are that the person is: entitled to some HB (or UC); and they appear to require some further financial assistance in order to meet their housing costs (in addition to the HB or UC to which they are entitled).
What do DHPs cover? DHPs can cover housing costs. The term is not defined but can cover: shortfalls in the rent, advances of rent, deposits and removal expenses.
What DHPs cannot cover ineligible service charges; increases in rent due to outstanding rent arrears; certain sanctions and reductions in benefit; shortfalls caused by HB or UC overpayment recovery.
DHP awards The statutory framework gives local authorities a wide discretion on:- whether or not to make an award of DHP in a particular case; the amount of the payment; the period they are made; the length of any payment; whether to backdate the award.
The Decision Making Process The statutory framework makes provision for : - the form and manner it receives claims; the decision making process on a claim and a review of a claim; When a LA may cancel further DHPs and recover DHPs already made; information requirement in relation to changes of circumstances.
SECTION TWO: The policy aims underlying the DHP scheme The Good Practice Guide contains: a list of objectives that LAs should have in mind; a list of groups LAs should consider prioritising; guidance on specific various groups affected by the Welfare Reforms.
Policy Statements on DHPs and the bedroom tax See policy statements reproduced in MA & Others: the only practical way to provide for the needs of some disabled persons with additional accommodation requirements was by means of DHPs; DHPs in line with a localism; DHP can take into account the circumstances of individual households LAs are accountable for the money they spend.
What is happening on the ground? Increase in demand for DHPs: more than half of housing association tenants affected by the bedroom tax had been unable to pay their rent; the number of council households affected by the bedroom tax who had rent arrears went up by 59 per cent; Applications to hardship fund surged by 300%.
DHP Underspend Persistent reports that LAs have underspent their allocation of DHPs. 8 November 2013 - Councils fail to spend hardship funds. 20 December 2013 - Use of DHPs DWP report 13 March 2014 The 155m hardship fund that local councils fail to spend
SECTION THREE: Public Law and the DHP scheme Public authorities must follow the law, not do things they do not have legal authority to do act reasonably and follow fair procedures comply with the Human Rights Act 1998; comply with EU law; and comply with the Equality Act 2010.
Welfare decisions based on entitlement: if the claimant satisfies the relevant statutory criteria, they will have an assertable right to benefit; the decision maker has no discretion whether to award benefit, and must instead apply the law as enacted; if there is a dispute as to entitlement, the claimant has a statutory right of appeal to a First-tier Tribunal (Social Entitlement Chamber).
Welfare decisions based on discretion: the legislation does not contain detailed rules that confer an entitlement to an award and the decision maker must consider the circumstances of each individual case; the decision maker is required to exercise a discretion in accordance with the general aims of the scheme; the decision maker must avoid fettering its discretion by applying a rigid set of rules.
A public law checklist Misdirection of law: A decision maker must have regard to the correct law. Ultra vires: Public authorities may only act within their powers. Promoting the object of legislation: Powers conferred for public purposes must be used in a way that Parliament can be presumed to have intended. Fettering a discretion: An authority must reach their own decision on each individual case.
Checklist cont. Taking into account irrelevant considerations Failure to take into account relevant considerations: Irrational / Wednesbury unreasonable: A public authority may not reach a decision which no reasonable authority could have reached. Procedural impropriety: A decision maker must act fairly and in accordance with the principles of natural justice.
The Human Rights Act 1998 A discretionary payment is not covered by Article 6 as it does not give rise to an assertable right to payment. an application for DHP may rise to an Article 8 claim in exceptionally in extreme cases but the threshold for a breach of Article 8 in the social welfare context is a high one
Equality Act 2010 Disability Discrimination and the duty to make reasonable adjustments Public Sector Equality Duty The Court of Appeal has made it clear that the duty not only applies to the general formulation of policy but also to decisions made in applying policy.
Section Four: Potential Challenges Challenges based on a refusal of a DHP in an individual case E.g. cases where the decision maker includes DLA or ESA as income expects a 20 contribution not eligible as failed to seek assistance to downsize accommodation, regardless of the claimant's circumstances.
(i) Taking disability-related benefits into account DLA is not intended to cover housing costs; it is a benefit that pays for the extra costs of having a disability. The DHP Guidance says a LAs may disregard income from disability-related benefits but over three quarters of local authorities are counting DLA Permission has been granted to judicially review Sandwell Council s policy
(ii) Indefinite awards The DHP Guidance - payments can be made for an indefinite period until the claimant's circumstances change. But most LAs have a policy of never making an indefinite award of DHPs and instead award DHPs for fixed periods Following MA and Others can argue that such a policy is inconsistent with the aim of the DHP scheme as described by Ministers.
(iii) DHP budget already fully allocated A LA may refuse a DHP on the basis that it has fully allocated its DHP budget, and hence cannot make a payment. But the DHP scheme is only partially funded by central government, via an allocation from the DWP. Unlawfully fettered its discretion by refusing to contemplate spending money which it could not recoup from central government.
(iv) Imposing conditionality terms on DHP payments Practice of requiring claimants to sign a action plan agreement before any payments are made; Policy of imposing conditionality to any further award Does this exceed the powers awarded to the LA under the legislation (ultra vires)?
The End But see Appendix