DHPs and bedroom tax – some facts everyone needs to know

Did you know the overwhelming majority of DHPs still goes to the private tenant?

No? Then read on.

Every timeI look at social media feeds today there are so many assumptions, errors and outright falsehoods stated about bedroom tax DHPs.  Time for some facts, all of which are sourced and contain no doubts as to validity and truth.

Actual numbers and amounts

  • The total amount of DHP funding allocated is £150m (S1/2013 published before government took away £5m to pay for foster carers exemption in March 2013)
  • Of that £150m in 2013/14 £25m has been allocated for bedroom tax DHPs

Source: HB Circular S1/2013

  • Government says the bedroom tax will save £500m – Originally £480m in purported impact assessment of June 2012 now stated to be £500m.
  • There are 660,000 households affected at circa £14 per week average (same June 2012 assessment)
  • Rent increase since then and £500m saving would equate to £14.52 weekly average for these 660,000 cases

Source: Bedroom Tax judgment today and June 2012 impact assessment:

Is the DHP funding adequate?

We see £25m of bedroom tax DHPs is to offset against a £500m cut and that means the DHP budget for bedroom tax cases equates to 5% of the amount cut.  

In simple terms 19 out of 20 affected cases will not get a DHP and only 1 in 20 will.

Yet LJ Laws ruled today this was adequate!!  However despite this the DWP has announced today a further £35m in bedroom tax DHPs this year and see below.

However the 1 in 20 figure is a statistical national average and this varies from council to council. For example in Merseyside we see a wide range of amounts of bedroom tax DHPs:

Knowsley 1 in 44 cases; Wirral 1 in 19 cases; Liverpool 1 in 33 cases; Sefton 1 in 30  cases and St Helens 1 in 41 cases – all the Merseyside detail is here

New DHP money – the additional £35m

  • The DWP issued a news release this morning to say another £35m will be added this year for bedroom tax DHPs.  (No full detail as yet and it is conditional as the news release makes clear)
  • This additional funding is 140% of the original £25m funding for bedroom tax DHPs which is quite strange as the bedroom tax JRs ruled today the original £25m was proportionate! (Has the coalition become spendthrifts on welfare you may ask?)
  • However note well that the government has announced that the total for this financial year and the following two is £350m in total.  So the initial £150m for 2013/14 means only £200m is left for the next two years – or this drops to £100m next year and the one after – a 33% cut in the DHP budget which sees a 1 in 44 chance of getting one in Knowsley fall to a 1 in 60 chance or thereabouts.

How long can a DHP be awarded for?

  • It is often stated in error that a DHP is paid for a maximum of 3 months or 6 months or 12 months. All of these are false and your local council can award an indefinite DHP if they so wish.  This was contained in revised DHP guidance issued in April 2013. Paragraph 5.2 on page 16 says:

Alternatively, you may wish to make an indefinite award until the claimant’s circumstances change. The start and end dates of an award are decided by LAs on a case by case basis.

DHPs – it is entirely up to each council!

  • The same revised DHP guidance says councils can class Disability Living Allowance and its replacement PIP as income for DHP purposes.  Or they can choose not to include which is customary for all other benefit determinations.  It is entirely up to each individual council to decide as paragraphs 3.8 and 3.9 make clear (and note well the use of the word ‘may’ throughout the document which means it is entirely up to each council to decide.)
  • Also this absolute discretion means that although one-sixth of each councils DHP allocation if for bedroom tax purposes any council could choose to spend 100% of its allocation on bedroom tax cases…or it could choose to spend 0%!

Source:  http://www.dwp.gov.uk/docs/discretionary-housing-payments-guide.pdf

What if a council overspends its DHP allocation on the bedroom tax?
  • As stated above a council may choose to spend 100% of its DHP funding on bedroom tax cases when only 16.66% of the total was allocated for bedroom tax cases.
  • Yet if a council does overspend it means, obviously, that it has less funding to spend on other DHP cases.  The two other principal cases for DHPs are the benefit cap which was allocated £65m of the £150 total and the private tenant that was allocated £60m.  (see below)
  • Note well that the non-payment of DHPs to benefit cap and private tenant cases will lead to higher and far quicker homelessness costs for each local council than bedroom tax cases.  So the less each council spends on benefit cap and private tenant DHPs the greater the homelessness cost it lands itself with.
  • In simple terms local councils have a financial incentive to spend more on benefit cap and private tenant DHPs and spend LESS than allocated on bedroom tax DHPs. This obvious issue will have devastating consequences for social tenant and social landlord as I explained here

As 54% of benefit cap cases are private tenants the total allocated for private tenants is the £60m plus 54% of the £65m benefit cap figure (£35.1m) so in total we see that the private tenant was allocated £95.1m of the total £150m DHP budget and the social tenant £54.9m

Many wrongly assumed that the £150m DHP was just for the bedroom tax and the social tenant and I could litter this page with references to when any coalition minister has been questioned about the bedroom tax has responded with we have put £150m into DHPs this year!  Yet as the S1 of 2013 HB circular shows it is just £25m not £150m

The above figures show the private tenant has been allocated 63.4% of the total DHP budget and the social tenant just 36.6%

Has anyone thought to ask the coalition to say how that is fair??? Even if we add the new (and conditional) £35m we see that the social tenant allocation increases to £89.9m and the private tenant still has more at £95.1m

The majority of DHPs still goes to the private tenant – Go figure!!


3 thoughts on “DHPs and bedroom tax – some facts everyone needs to know

  1. If I were single, as an under-35, I would have had to pay £20 a week from my benefits to stay in my one-bedroom private rented flat instead of sharing a house with a stranger. There are no concessions made to my disability and it is impossible to rent a room in my town for the LHA shared rate anyway. As a social tenant, I would have been allowed to have a one-bedroom flat fully covered by my housing benefit. How is that fair?

    If my landlord raises the rent (it is coming – there have been no increases for four years), I will have to cover the shortfall yet again.

    Is it fair that a three-bed council house has rent much lower than my one-bedroom? Not to mention the communal laundry (saving electricity) and private garden (“free” veg and fruit). Or small mercies like plastic double glazing instead of 30-year old single-glazed sash and case relics.

    There will always be discrepancies between the private and social housing sector. It would be fair to mention the drawbacks of a private let as well – the higher rents, higher shortfalls. and lower quality (by definition the bottom 30% of houses on the market). Or that any repairs are up to my private landlord who has no money. If I complain, I will be out in the street whereas the council will always carry out the repairs eventually. Also, LHA has been affected by the “bedroom tax” for years.

    I said it before but it angers me so much when social tenants are seen as those vulnerable whereas private ones must be rolling in it. Let’s not let the government pitch us against each other.

  2. Social tenants are newly vulnerable because of the Bedroom Tax, workshy. They used to have it much better than those of us in the private sector and most still do, but what’s happening to those deemed to have a ‘spare room’ is evil. It hits the disabled hardest, as they often are counted as over housed when they really need a room for equipment and somewhere for the overnight carer to sleep. Some two thirds of those affected are chronic sick or disabled.

    As you say, let’s not let this government’s divide and rule policy get to us. We need more security in the private rented sector, and we should not be taking away social homes from people in the greatest need.

  3. I arrived home from hospital 2 days ago, after a two week stay, having major surgery to have a pancreatic tumour removed, the following morning I received a phone call from my H/A hassling me “do I still want to downsize from my home of 25 years” I was pretty annoyed with them, of course I do not want to move from my HOME, if the bedroom tax is not abolished, I will have no choice, i would not mind but they were not even offering me a smaller home to move into, I am under occupied by 2 bedrooms according to the Governments criteria, even though I have no spare bedrooms. Because of my husband’s and my chronic disease’s we sleep in separate rooms and the other so called bedroom falls below 70sqft, luckily enough for me I was awarded some help with a DHP until 1st October, but after that it stops, god knows what will happen then, as on the day of my diagnosis I received legal proceedings to evict me from my home, , which as for now been temporary delayed, this government do not care if we all end up living in the streets they just want rid of social housing full stop.
    Re the previous 2 comments, I agree that the government are doing a great job of divide & rule, not just the bedroom tax, but with all the other benefit cuts

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