At the meeting of Welfare Reform Sub Committee on 16 February, Members were provided with an update on the 2015/16 Discretionary Housing Payment (DHP) spend and proposed amendments to the current policy as a consequence of the funding allocations and anticipated increased demand for the financial year, 2016/17.
Members noted and agreed to amend the current award criteria by lobbying and making representations to the Scottish Government after hearing that if the Council were to continue with the current proposal, then by 2017 – 18 the current reserves would be drained. This was based on the Department of Works and Pensions and Scottish Government indicative allocation of Discretionary Housing Payments for 2016/17.
The current policy, which was agreed by this committee in August 2015, has reduced the level of award levels. Since implementation of the policy, 242 individual applicants have been received from customers who had been receiving a DHP under the old policy: 97 of these applications resulted in an award, with 93 of these receiving the full 23 week award.
170 applications were received from new customers, with 96 of these applicants receiving some assistance. 37 of these customers received the full 23 weeks.
There is currently £383,700 available in reserve. Of this £200,161 is required to cover the current year (2015/16). This leaves £183,539 available for future years. As final confirmation of the 20% top up from the Scottish Government will not be confirmed until May 2016, any reduction on the indicative allocation would reduce reserves available in the future.
The Government announced a reduction to the benefit cap from 1 April 2016. The Benefit Cap for these families will change from £26,000 to £20,000 per annum. The maximum weekly income from benefit will therefore reduce from between £500 to £384.62 per week. The Benefit cap for single people will change from £18,200 to £13,400 per annum; the maximum weekly income from benefit will therefore reduce from between £350 to £257.69 per week.
Analysis of current caseloads indicates around 81 families and 10 single people will be impacted by this reduction. The estimated weekly reduction (loss) to this client group is £5,700. This is an annual loss of Housing Benefit of £296,000. It is anticipated a significant proportion of these customers will apply for, and be awarded, a DHP.
Universal credit was introduced in Dumfries and Galloway on 27 April 2015. This new benefit only awards the LHA rate (or actual rent, whichever is lower) for customers not in Housing Association accommodation. This also applies to customers residing in temporary accommodation. The expectation is Local Authorities will/can cover any shortfall with DHP.
To date there has been £952 spent on DHP, on customers in this circumstance. With the accelerated roll out of Universal Credit in 2016/17, demand in this area will only increase.
Councillor Colin Smith, Chair of the Welfare Reform Sub-Committee said: “Given the anticipated demands for DHP in 2016/17, we have had no choice but to amend the Policy. We have carried out a thorough investigation, on the estimated weekly costs of DHP expenditure based on the qualifying criteria and have recognised that our reserves were not sufficient to meet this proposed demand.
We are therefore amending our policy to ensure that the most vulnerable people in our Region are assisted for the maximum time possible and ensuring our reserves will be adequate for this purpose.
Officers are now compiling a further report based on the evidence we have collated for the basis of our Anti-Poverty Strategy. We will then use this report to make representations to the Scottish Government to come up with a sustainable, long term solution to this ongoing problem.”
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