DWP flip flops on Universal Credit & DHP guidance

There’s so much that’s wrong in principle with the Government’s Benefit Cap on Social Security that we sometimes overlook the way it is being implemented.  But with roll-out of the lower £440 a week cap (for families in London) now complete, we are beginning to see the harsh realities.

Last week, I met a lone parent served with a Notice of Seeking Possession by her local authority landlord after falling into rent arrears because of the lower cap.  Her benefits were already capped at £500 a week, leaving her to pay nearly half her rent of £120 a week.  Since 7th November, she has been required to pay £105 a week – an impossible ask.  Hopefully, possession proceedings with be withdrawn and a Discretionary Housing Payment awarded to help her meet this shortfall. 

As with the original Benefit Cap, our advisors will be looking to secure DHPs for all those clients facing such shortfalls.  However, just before Christmas, the Department for Work & Pensions (DWP) “Housing Benefit Direct” bulletin to local authorities put a big question mark against our ability to obtain that extra help for clients on Universal Credit.  It made clear that UC claimants on Managed Payment to their Landlord (MPTL) should only get a DHP if they come off MPTL.

This is bonkers.  Many of Z2K’s clients are either vulnerable or have had financial difficulty or rent arrears in the past.  Housing Benefit / Local Housing Allowance payments direct to their landlord are an essential means of getting those clients tenancies to start with or retaining those they have.  As they move on to Universal Credit, we would be looking for them to have MPTL.  DWP’s guidance makes that very difficult.  Our advisors were so surprised to see this unnecessary restriction that we submitted a Freedom of Information request to check it was accurate.  DWP’s response was that:

“DHPs can only be paid to those who are in receipt of Housing Benefit or Universal Credit, providing the UC award includes an amount for housing costs …. If a UC MPTL is preventing an application for a DHP from being made (because there is no longer a housing shortfall), in agreement with the claimant DWP can remove the MPTL, thereby enabling the claimant to make a DHP application.  Once the MPTL is removed the claimant will be responsible for paying their own rent.”

This revealed the apparent technical issue – the shortfall between housing costs and benefits no longer exists under MPTL, because the landlord gets their money before anything else. But there is nothing in the DHP regulations that would stop a local authority awarding one anyway. Z2K raised our concerns with an MP in one of those boroughs where the full UC service is shortly to be rolled-out.  In response to a Parliamentary Question he then tabled the Minister said:

“DWP does not see any reason why DHPs cannot be paid to Universal Credit claimants who have Managed Payments to their Landlord in place.”

This position has now been confirmed in a new edition of the Housing Benefit General Information Bulletin published on 3rd February, which says:

“[DHPs] are very flexible and are made at the discretion of the LA where they consider that further financial assistance towards housing costs is required. Universal Credit claimants who meet the eligibility criteria are considered for a DHP award in the same way as anyone else.”

The DWP has thus executed a perfect 180 degree turn on this issue. Considering how many other terrible policies they have perhaps it’s something they should try more often! The worrying thing is of course that DWPs initial response to queries from local authorities on this issue was so plainly wrong. The only reason as to why DWP officials should feel the need to invent such absurdly spurious legal reasoning is that their default position is always to limit claimant’s access to support. At least in this instance they were able to admit they were wrong, something totally unheard while Iain Duncan Smith was at the helm. Perhaps this is more evidence of a subtle shift in attitude?

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About Marc Francis

Marc is Z2K's Policy & Campaigns Director. He was formerly the Housing & Neighbourhoods Policy Advisor at Save the Children and Public Affairs Manager at Shelter, leading successful campaigns against the long-term use of Bed & Breakfast accommodation for homeless families and for a Tenancy Deposit Scheme to be included in the Housing Act.

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