BOROUGH OF POOLE
COMMUNITIES OVERVIEW AND SCRUTINY COMMITTEE
15 JULY 2013
WELFARE REFORM AND DISCRETIONARY HOUSING PAYMENT POLICY
1 PURPOSE OF REPORT
1.1. To provide Members with an update on Welfare Reform and in particular to monitor the implementation of the Discretionary Housing Payment Policy for 2013/14 which is being used to support claimants on housing benefit affected by Welfare Reforms.
2. DECISION REQUIRED
2.1 None. Communities Overview and Scrutiny Members note the content of this report.
3. BACKGROUND
3.1 The Discretionary Housing Payment (DHP) scheme is separate to the Housing Benefit Scheme and Localised Council Tax Reduction Scheme. Discretionary Housing Payments are grant funded by the Department for Work and Pensions (DWP) and are additional payments for claimants needing further financial assistance with housing costs. The payment may enable a claimant to move to affordable accommodation or to meet shortfalls between an eligible rent liability and Housing Benefit award or Universal Credit award.
3.2 Members approved the current DHP policy in April 2013. This policy took account of expected welfare benefit changes due to be implemented in 2013.
4. WELFARE REFORM
4.1. The Government continues to implement further Welfare Reforms. Housing Benefit Social Sector Spare Room Subsidy restrictions applied from 1 April 2013. This national change reduced housing benefit for working age residents who under occupy their property. In Poole around 700 households were affected by this change.
4.2. Information has previously been given to this Committee about the ‘Benefit Cap’. The ‘Benefit Cap’ will affect workless working age people. There will be a maximum amount of benefit that a household can receive. This change seeks to ensure individuals are no longer given more money when they are out of work than they could reasonably expect to earn from working. For the purposes of the ‘Benefit Cap’, a household refers to the benefit claimant, their partner (if they have one) and any child or qualifying young person for whom that adult or couple are treated as responsible when working out their housing benefit.
4.3. The cap has been introduced in four London boroughs since April 2013 (Croydon, Bromley, Haringey and Enfield). From 15 July 2013 the ‘Benefit Cap’ will begin national implementation across other Local Authority areas including Poole.
4.4. Analysis of final data scans from the DWP in May now shows 80 potential households that may be affected. From those affected it is known that 1 household is already attached to the Families with Futures programme and a further 4 households are due to be attached.
5 DISCRETIONARY HOUSING PAYMENT FUNDS - IMPACT OF WELFARE REFORM
5.1 In accordance with the Council’s policy every DHP claim is decided on its own merits and an ‘affordability judgement’ is applied which, by reviewing income and expenditure, identifies the contribution a household could reasonably be expected to make towards their housing costs. Information is also gathered from agencies or services that may be supporting the individual or their family, for example Housing and Community Services, welfare advice agencies, Social Services and Health teams.
5.2 In the first 3 months of this financial year, as expected, the number of applications for a DHP increased. The service received 235 applications between 19 February 2013 and 20 June 2013 compared with 133 applications over the same period last year. The Benefits Service works with other agencies to resolve the claimant’s long term options and prevent homelessness. As well as the impact on the Benefits Service the increased demand affects a number of support services, such as money advice and budgeting services, Housing and Community Services, Your Money Team and Citizens Advice Bureau.
5.3 Using the DHP Policy the service provides interim financial assistance to claimants whilst they engage with support services to change their need for a DHP award. Whilst it is early in the year for detailed analysis Exhibit 1 below provides a summary of DHP payments made to date. Early in April 2013 a significant amount of spend related to lump sum housing costs for rent in advance which enabled claimants to move to affordable accommodation.
5.4 Since 1 April 2013 decisions have been made on 216 applications (This figure includes applications submitted before 1 April 2013). 117 of the decided claims were successful and 99 unsuccessful. As at 20 June 2013 60 applications are awaiting a decision.
5.5 The main reason for an unsuccessful application is due to the ‘affordability judgement’ that shows claimants can meet the shortfall when making a comparison between their income and declared expenditure. Where the application related to lump sum costs, such as rent in advance payments, applications have been refused because the new property was not affordable and/or the rent charged was above Local Housing Allowance levels.
5.6 Below is a chart summarising the reason for spend and % distribution. 51 DHP awards have been made to households affected by the Social Sector Subsidy restriction and the payments to date total 23% of spend.
Exhibit 1: Chart explaining reasons for DHP awards 2013/14
5.7 The intended outcome from most awards is to assist with short term rental costs until the claimant reaches a point of affording their accommodation. This is either by seeking employment; reviewing their expenditure or securing alternative accommodation. 6 longer term awards have been made for ongoing rental costs for a disabled person in adapted accommodation.
6 FINANCIAL IMPLICATIONS
6.1 The DHP Policy is monitored to ensure awards are within the resources made available to the Council. The DWP grant for this year is £275,652. The Council has not committed additional financial resources to spend above this limit.
6.2 As at 17 June 2013, the DHP budget is within resource and committed spend to date for this financial year for existing decisions totals £69,266. This compares to the total spend in the entire financial year 2012/13 of £66,644. At the time of writing this report there are 60 outstanding applications awaiting decisions. Comparing these amounts demonstrates the increase demand on the DHP fund as a result of Welfare Reforms taking effect since April 2013. It also shows that the Council is using those additional Government funds to actively manage and support claimants through the change in welfare support.
6.3 The available fund remaining for new awards is currently £206,386. If all households forecast to be affected by the benefit cap applied for a DHP and were successful then the impact on the DHP fund from 15 July 2013 until 31 March 2014 is forecast at approximately £192,400. Members should note however that not all households affected by the Benefit Cap may require a DHP award. Where households engage with Job Centre Plus and find employment the capping of their award will end.
6.4 In addition to this, the financial impact is different for each household. For some households housing benefit will be reduced by less than £1 a week. For others the financial impact is significant, the highest reduction in housing benefit affects one household by £253.00 a week. The Benefit Service is intending to allocate a dedicated Benefit Officer to work with each ‘capped’ household and these households will be a priority for engagement work and access to DHP funds.
6.5 The existing DHP policy emphasises that continuing payment is reliant upon the claimant engaging with the Benefit Service and other support agencies to enable a change in outcome and behaviours with a view to eventually remove the need for ongoing DHP awards.
6.6 In addition to a DHP award 38 claimants also received an Exceptional Hardship Payment (EHP) towards their Council Tax liability. The EHP decisions are made in accordance with the Localised Council Tax Reduction Scheme (Class G). To date a total of £1,651 has been paid to claimants under this section of the scheme against the available fund of £30,000.
7. LEGAL IMPLICATIONS
7.1 The legislation governing DHPs can be found in :
· Child Support, Pension and Social Security Act 2000.
· The Discretionary Financial Assistance Regulations 2001(as amended).
· Article 7 of the Discretionary Housing Payments (Grant Order) 2001.
8. RISK MANAGEMENT IMPLICATIONS
8.1 The impacts of Welfare Reforms are monitored under the Council’s Corporate Risk Register. The Council has regularly managed the demand for Discretionary Housing Payments within the grant funding.
8.2 There is a risk that the impact of several welfare reforms at the same time will increase demand for services. The reductions in housing benefit income for all those affected is above the level of DWP grant and exceeds permitted spend totals. However the policies emphasise claimant engagement with support services to change behaviours/expectations and to mitigate a long term dependency on Discretionary Housing Payments.
8.3 Expenditure and demand is being regularly monitored and Officers will continue to review the impact on individuals and Council resource requirements.
9. EQUALITIES IMPLICATIONS
9.1 Discretionary Housing Payments are available to all residents who receive housing benefit and/or Universal Credit in accordance with Government Regulations. The DWP produce national impact assessments regarding the Welfare Reforms and any effect this has on the need for DHP awards. These impact assessments inform any grant funding allocated to the Council for mitigating any hardship caused by Welfare Reforms locally.
9.2 The application process for housing benefit takes place through different agencies so there is limited equalities data regarding all housing benefit claimants. Since April 2013 the application process for a DHP collects equalities data based on the Council’s corporate model for gathering this information. 81 claimants provided some information and 37 of those claims have been processed. This means that it is too early to make any definitive judgements.
9.3 From the information provided the following is known:
9.3.1 Gender: 37 of the decided claims declared gender information. Of those 28 were Female and 9 Male. 16 of the successful claims came from females and 2 from males.
9.3.2 Ethnicity: 37 of the decided claims declared ethnicity information. 36 declared themselves as White British and 1 from another BME community. Of those 17 White British claims were successful and the 1 BME community claim was successful.
9.3.3 Disability: 18 of the decided claims provided information about disability. 15 declared they were ‘limited a lot’ and 3 declared they were ‘limited a little’. Of those ‘limited a lot’ 6 claims were successful and 9 unsuccessful. Of those ‘limited a little’ all 3 claims were unsuccessful.
9.4 The policy will continue to be reviewed on an annual basis to ensure it meets the principles for the grant funding and supports the financial needs of eligible claimants. Additional monitoring work is being undertaken to ensure that ‘vulnerable’ claimants are accessing the additional financial support which may be available to them.
10. CONCLUSIONS
10.1 The Discretionary Housing Payment fund is for Councils to support residents when they face financial hardship in meeting their housing costs. A key element of the policy is claimant engagement with services to support change in behaviours and expectation. It is too early to identify if the spend is meeting intended outcomes and the full impact of Welfare Reforms. With the implementation of further reforms approaching Financial Services will continue to closely monitor applications and spend on a regular basis.
A RICHENS
CHIEF FINANCE OFFICER & HEAD OF FINANCIAL SERVICES
Contact Officers:
Adam Richens
Telephone: 01202 633399
Email:
Alan Fletcher
Head of Revenue and Benefits
Telephone: 01202 633113
Email:
Judi Hatchard
Customer Service and Financial Assessment Manager
Telephone: 01202 634254
Email:
Background Papers:
Discretionary Housing Payment Policy 2013
http://www.boroughofpoole.com/apply/benefits-discretionary-housing-payment-application-form/