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%!
- 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!!