Housing Benefit Notes

These notes are provided by the 

LOCAL HOUSING ALLOWANCE REFORM GROUP

Housing Benefit: Size Criteria and Discretionary Housing Payments
Standard Note:
SN/SP/4887
Last updated:
21 April 2010
Author:
Robert Long & Wendy Wilson
Section
Social Policy Section
This note explains how the application of size criteria in regard to Housing Benefit operates and provides information on discretionary housing payments. The application of the size criteria has particular implications for disabled people who require an additional bedroom in order to accommodate a carer.
Contents
1 Assessment of Housing Benefit: Size Criteria 2 
1.1 Impact on disabled people 3 
1.2 Consultation exercise 6 
2 Discretionary Housing Payments 7 
Parliamentary Questions 9 
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1
Assessment of Housing Benefit: Size Criteria
Local rent officers, when determining benefit claims,1 allow one bedroom or room suitable for living in, for each of the following occupiers (each coming into only the first category for which s/he is eligible):

A couple;

A person who is not a child (i.e. someone aged 16 or over);

Two children of the same sex;

Two children under 10;

A child.
In addition, occupiers are allowed the following number of rooms ‘suitable for living in’:

Fewer than 4 occupiers 1 room

4-6 occupiers 2 rooms

7 or more occupiers 3 rooms
The rationale behind the size criteria is that Housing Benefit should not fund claimants to live in properties that are larger than they need based on the number of occupants in the household. This was explained by the then Parliamentary Under-Secretary of State at Work and Pensions during an adjournment debate in 2002. Note that rent officers have no discretion in applying the size criteria (emphasis added):
Let me begin by explaining our policy on the benefit in relation to private sector tenants, and explaining why we have rules such as the size criteria.
Unlike social housing, the deregulated private rented sector is not subject to any internal rent controls. It is essential that we exercise control over housing benefit expenditure, so that the needs of people receiving benefit are balanced against those of taxpayers—indeed, those of the wider community. Surely it is a fundamental principle that people receiving housing benefit should not have their rent met in full if the level exceeds the broadly average rent level for an appropriately sized property in the area where they live.
Rent officers play an important part in the administration of housing benefit in the deregulated private rented sector. In carrying out his or her functions, the rent officer will make a determination based on certain criteria. He or she may make two or more determinations on a particular decision if those criteria apply to the same property. One is the size-related rent, which is the main subject of this debate.
The size criterion works like this. If a claimant lives in a property that exceeds the defined size criteria for his household, the rent officer must determine a rent for a similar tenancy of the appropriate size for that household in the vicinity. By “vicinity” we mean the immediate surrounding area. The defined criteria provide for one bedroom per couple and one for each single person over 16. The rules also state that two children—under 16—of the same sex should share a bedroom, as should two children of different sexes under 10. Any child who does not come into those categories is
1 Ignoring kitchens, bathrooms and toilets 2
allowed his or her own bedroom. We also allow the household to have up to three living rooms, depending on how many people live in it. A one, two, or three-person household can have one living room, four people can have two, and three are allowed when there are more than four people in the household. We pay some attention to household circumstances.
The rules are set out in the Rent Officers (Housing Benefit Functions) Order 1997, which covers England and Wales, and the Rent Officers (Housing Benefit Functions) (Scotland) Order 1997.
The rent officer has no discretion to alter the size criteria for any particular case—for example, where, due to health reasons, a husband and wife would find it difficult to share the same bedroom.2
These criteria have not been affected by the introduction of the Local Housing Allowance.
1.1
Impact on disabled people
The application of the size criteria has particular implications for disabled people and people with medical conditions who require an additional bedroom as a result of those conditions. For example, a couple will only receive Housing Benefit based on one bedroom accommodation even if they have to sleep in separate rooms. These people experience a shortfall in their Housing Benefit compared with their rent level. The impact of the size criteria on people with medical conditions has been raised in the House previously;3 at the time the Government made a commitment to consider the issue.
The Equality and Human Rights Commission has raised these issues with the Department for Work and Pensions and asked for a proper assessment of the effect of the size criteria on people with disabilities.4 Although the size criteria provisions under the Local Housing Allowance are the same as under the old Housing Benefit system, it is argued that the disadvantages experienced by disabled people are clearer because the amount of benefit and size of home that each applicant can get is now publicly known.
The Commission wrote to the DWP in May 2009 concerning the failure to carry out an equality impact assessment on the Local Housing Allowance before its introduction in 2008. The DWP said that it had relied on the equality assessment for the 2007 Welfare Reform Act rather than undertaking a separate assessment for the Local Housing Allowance as the rules on additional space for carers had simply been carried over from the old regime. The DWP agreed to carry out a retrospective assessment of the policy and said it would issue a consultation paper on Housing Benefit reform in 2009 – this was published in December 2009 (see section 1.2 below).5
On 10 September 2009 a lower tribunal, formerly the social security appeals tribunal, held that the decision of Walsall Council to restrict payment of LHA to a one bedroom property for a disabled woman who needed a second bedroom for a team of 6 carers to sleep in on a rota basis, was in breach of the European Convention on Human Rights as it “discriminates against her as a severely disabled person in need of constant care and supervision.” The
2 HC Deb 24 June 2002 c717
3 HC Deb 24 June 2002 c718
4 Inside Housing, “DWP is probed for neglecting equality”, 30 October 2009
5 Cm 7769, Supporting people into work: the next stage of Housing Benefit reform, 2009 3
tribunal’s decision does not set a precedent; however, if Walsall appeals and the case is heard by the upper tribunal the decision could then set a binding precedent.6
The Work and Pensions Select Committee carried out an inquiry over 2009-10 into the Local Housing Allowance and received submissions from various disability groups commenting on the impact of the size criteria on disabled people. For example, Neuro-diversity International submitted the following comments:
Local Housing Allowance and its Impact on Disabled People

Unfortunately as this legislation currently stands it totally ignores the needs of severely disabled people who require live-in care, the needs of disabled children and their families, and the additional needs some pensioner couples have for an extra bedroom to meet their needs.

This has resulted in a 3 – tier Housing Benefit system where disabled people with different housing tenures are treated totally differently.

Unless changed this legislation will deprive the most severely disabled people of their human rights to independent living, and the ability to participate fully in society. This is directly the opposite of what the government claims its intentions are in their Independent Living Strategy.

A recent tribunal hearing found that the size criteria regulations were incompatible with the European Convention on Human Rights, articles 14, 8 and 1.

Similarly EHRC have expressed their concerns about the lack of any Disability Impact Assessment being carried out before this legislation was introduced and highlighted the extremely negative qualitative effect these regulations are having on disabled people. The Regulatory Impact Assessment carried out on the Welfare Reform Bill did not consider the impact of LHA on disabled people either. This is in spite of the fact that in a written parliamentary response Lord McKenzie stated that 1 in 4 people living in the private rented sector were disabled.

DWP have stated that they expect the additional needs of disabled people to be paid for by local authorities from Discretionary Housing Payments but again this is not working in practice. Local Authorities do not have enough money in many cases to meet such extra needs from DHPs. Awards, if made at all, are made for very short periods of time then re-assessed with no guarantee they will continue. This means that disabled people have no way of knowing how much help they can get with their housing costs, or for how long this will last.
Implications of Local Housing Allowance for disabled people who require 24 hour live-in care.
Most people who need live-in care employ a team of carers to provide this support and under the ‘old’ Housing Benefit regulations disabled people were able to receive housing benefits to cover the necessary cost of renting a 2 bedroom property in order to meet their care needs. Under the new legislation introduced in 2008 disabled people, employing a team of carers/PAs, or with a live-in carer, can no longer receive help towards the cost of renting a 2 bedroom property and therefore must bear the cost of paying for accommodation for the extra room needed themselves.
6 Inside Housing, “Benefit regulations discriminatory”, 20 November 2009 4
Under the new Local Housing Allowance regulations only if the property is the main home of a single carer can the disabled person claim for a 2 bedroom property. This is unrealistic unless it is a family member. Independent Living does not mean that young disabled adults should be forced to remain living with their parents or other relatives.
This situation is further complicated by the fact that the regulations are totally out of date and talk ONLY about care provided by charitable and voluntary organisations thus ignoring the fact that the majority of disabled people now have care funded through Direct Payments from Social Services. This means that if you do have a live-in carer paid by yourself, through Direct payments they can be classed as a non-dependent and you can then lose your entitlement to Severe Disability Premium.
The fact that people with severe disabilities who require 24 hour care normally also have specific housing needs, such as a property with level access, one large enough in which to turn a wheelchair, space for essential equipment such as hoists, shower chairs, etc. to enable them to live independently is also totally disregarded as only one rate of Local Housing Allowance is paid regardless of the rent payable on the property. In most cases those with a disability need a larger than average property which would normally cost more and which was taken into account under the ‘old’ rules applying to Local Area Reference rents, but which is not accommodated within the scope of Broad Market rental Areas.
If disabled people in need of 24 hour care are forced to remain in residential homes then this is not only contravening all stated government policies on independent living but is far more costly to the tax payer.
In some parts of the country, eg Stratford-on-Avon district, people on the waiting list for social housing are actually being told to rent in the private sector as there is no social housing available for them, yet local councils also say that they cannot afford to pay for the extra housing costs for disabled people from their DHP allocation.
Local Housing Allowance and the impact of the size criteria on families caring for a disabled child/ young adult
Both under the old Housing Benefit regulations and new Local Housing Allowance regulations the number of bedrooms that a family can claim help with the cost of is restricted and this can lead to a total loss of dignity for the disabled child/ young adult. This applies particularly to the private rented sector.
For same sex children, under 16 years of age only one shared bedroom is allowed and for different sex children under the age of 10 years, only one shared bedroom is allowed, regardless of any needs for care, or privacy, such children may have through the night. Constant night-time disturbances will disrupt the life of the non-disabled sibling forced to share a bedroom
There have been cases where children have been taken into care, for the sake of an additional payment for an extra bedroom of £20 per week compared to the cost of fostering a disabled child which can be higher than £1,250 per week. This is not cost effective for the tax payer.
Where children have been taken into care this destroys their human rights to a family life.
5
Implications for pensioner couples
Some pensioner couples have disabilities which mean they need a separate bedroom each but with the legislation as it stands this is not possible.7
The report of the inquiry was published in March 2010; the Committee concluded:
167. There is clear evidence that the current LHA rules constitute a real barrier to independent living for disabled people who require an extra bedroom and we believe this requires urgent action from the Department. As a result of the continuing failure to conduct an equality impact assessment and demonstrate compliance with the Disability Equality Duty, the Committee remains very concerned about this aspect of Local Housing Allowance. We strongly disagree with the way in which the consultation on Housing Benefits has put the initial question about this policy and recommend that the Department changes LHA rules as a matter of urgency to allow for reasonable adjustments for disabled people.8
Claimants who experience a shortfall in Housing Benefit payments can apply for a discretionary housing payment – see section 2 below.
1.2
Consultation exercise
As noted above, in December 2009 the DWP published a consultation document, Supporting people into work: the next stage of Housing Benefit reform, which sets out various proposals to reform Housing Benefit to complement the Government’s “wider welfare programme by supporting people to move into work.”9 In relation to the application of the size criteria, the consultation paper notes that the criteria “do not allow for the additional pressures that some families face – such as the needs of disabled people to have space for a carer to stay overnight, or the needs of single parents who have shared custody of children.” While noting that there is a need to avoid increases in cost pressures, the consultation paper asks for comment on “changes to the size criteria would not increase overall costs but would be more appropriate for meeting family needs.”10 The paper cites the example of raising the age at which a young person qualifies for their own room from 16 to 18 and using the savings generated to provide for extra space for disabled people or parents with shared custody of children. The specific questions the consultation poses in relation to the size criteria are:

Should the Local Housing Allowance size criteria be adjusted?

Should Housing Benefit be extended to provide for an extra bedroom where there is an established need for a room for a non-resident carer?

Is there a case for providing for an extra bedroom in the size criteria to help parents who need to care for non-resident children if there is evidence that working households can do so?11
The consultation period closed on 22 February 2010.
As noted in section 1.1 (above), the Work and Pensions Committee objected to the way in which the question around the application of the size criteria had been focused on the need
7 http://www.neurodiversityinternational.org.uk/3010-select-committee-on-local-housing-allowance.shtml
8 Work and Pensions Select Committee, Fifth Report of 2009-10, Local Housing Allowance, HC 235, March 2010, para 167
9 Cm 7769
10 Ibid p29
11 Ibid p29 6
to make savings. The Committee did not support raising the age at which young people qualify for their own room:
164. When the consultation eventually began in December 2009, it presented the issue as a question of finding savings from elsewhere, asking: “would it be fair to raise the age which a young person qualifies for a separate bedroom […] and to use the savings to provide extra space for disabled people”. Mr Lister of the CIH explained that the Government is proposing “that the age at which a child qualifies for a room of their own should be raised from 16 to 18, and the broad justification for that is that the size criteria in housing benefit are more generous than the overcrowding standards”. However, he argues that “the overcrowding standards were set in 1935 and we do not think that they are acceptable now.
In fact, the ODPM in 2004 described them as being completely unacceptable, so we do not think that is justifiable”.
165. The EHRC was critical that the way in which the question is posed did not consider the Department’s duty to have due regard to the need to promote disability equality.12
The Minister’s evidence to the Committee on this point emphasised the need to take account of affordability issues.13
2
Discretionary Housing Payments
Those receiving Housing Benefit or Council Tax Benefit but suffering from a shortfall in their rent can apply for an additional discretionary housing payment. To qualify, the only rule is that there must be a shortfall between benefit being paid and the rent, but the council will usually take into account special circumstances that contribute to financial difficulties.
Each Housing/Council Tax Benefit department is given a pot of money for discretionary housing payments and they are allowed to decide who should be given the payments. As noted above, the Housing/Council Tax benefit department will usually take into account any special circumstances that contribute to financial difficulties, for example, if the claimant:

has to pay child maintenance

has to pay legal costs

has extra heating costs because he/she spends a lot of time at home because they are sick or disabled

has additional travel costs because he/she travels to a doctor or hospital or cares for a relative or friend.
A claim form to apply for these payments can be obtained from the local council. If the council turns down an application an individual is free to ask them to reconsider, but if they maintain their decision then the matter cannot be appealed.14 However, once an awarded discretionary housing payment has finished, it is possible to re-apply for further payments. The level and duration of the payment are at the discretion of the local authority, although the
12 Work and Pensions Select Committee, Fifth Report of 2009-10, Local Housing Allowance, HC 235, March 2010
13 Ibid para 166
14 Shelter, Discretionary Housing Payments 7
level of benefit plus the discretionary payment must not exceed the weekly eligible rent or the weekly Council Tax liability.15
The Department for Work and Pensions’ website has a note in its Q&A section on the relationship of discretionary housing payments to Local Housing Allowance (LHA), and the possibility of higher rates of LHA for disabled people:
Q. Will there be any flexibility in LHA to reflect the needs of customers with disabilities? A. We appreciate that disabled customers can be limited in the type of property that they can rent because they may require a more expensive home without stairs or closer to local facilities. They may also need larger property for specialist equipment. Single disabled customers, under 25 and in receipt of Severe Disability Premium, will qualify for a higher rate of LHA rather than the shared accommodation bedroom rate. However, other disabled customers will not be entitled to a higher rate and we feel, rather than adjusting the LHA rate for all people with disabilities, local authorities will be able to continue to use discretionary housing payments, to ensure that these customers can find decent accommodation that meets their needs.16
A number of organisations that submitted evidence to the Work and Pensions Committee’s inquiry into LHA argued that discretionary housing payments were inappropriate for disabled people:
157. The Department has stated that it expects the additional needs of disabled people to be paid for by local authorities from Discretionary Housing Payments.172 However, a number of submissions have argued that this is not working in practice. The Warwickshire and Coventry Council of Disabled People points out that DWP issued parallel instructions to housing departments that they must make additional payments for disabled people’s essential disability related housing costs strictly under three simultaneous conditions a) payments must be discretionary b) they must be strictly temporary for a short term only and c) they must only be made while there is surplus budget available, regardless of the needs of the disabled people.
158. Ms Phelps of CAB stressed that “the problem with the Discretionary Housing Payment is that it is not a right: instantly disabled people are put at a disadvantage because they are not entitled to this; it is just whether the local authority chooses to use its discretion, has it in the budget, and, anyway, it always does it on the short term. […] To expect people with a disabled family member to have to live under those circumstances is just not acceptable”.
159. Ms Holden of the IRRV emphasised that “over the past year to 18 months, as the country has been through the recession, we have found real calling on the DHP for short periods for people who really did need it for short periods of time while they have been job-seeking, and we have found that being able to support our long-term DHP customers has become increasingly difficult”. The Local Government Association argued that “councils do not have enough money in many cases to meet such extra needs from DHPs. The LGA repeats its request for DWP to provide substantially greater resources for DHPs.”
160. Baroness Wilkins stressed that the current situation “is not compatible with the Disability Equality Duty or the Human Rights Act, is causing the disabled people
15 Department for Work and Pensions, Guidance for Local Authorities on the Operation of Discretionary Housing Payments, 2001. Document is now stored on the Department for Communities and Local Government website.
16 Department for Work and Pensions, Housing Benefit FAQs 8
affected real hardship and loss of control and therefore demands urgent action from Government”. The Warwickshire and Coventry Council of Disabled People suggested “this is directly the opposite of what the government claims its intentions are in their Independent Living and Putting People First Strategies”.17
Parliamentary Questions
The following Parliamentary Question addresses the issue of the provision of discretionary housing payments for disabled persons with live-in carers:
Rt Hon Lord Morris of Manchester: asked Her Majesty’s Government: Why no disability impact assessment was carried out prior to introducing the local housing allowance; whether the provision of extra housing space for disabled persons with live-in carers is classified as a housing need or a social care need; and how many people have applied for discretionary housing payments.
Lord McKenzie of Luton: During the Welfare Reform Bill regulatory impact assessment it was acknowledged that the majority of disabled recipients lived in the social rented sector and would not be covered by the local housing allowance (LHA). It was, therefore, not appropriate to carry out a detailed disability impact assessment prior to introducing LHA. It is estimated that 5 per cent of pensioners and 10 per cent of working-age people who are disabled live in the private rented sector. In circumstances where disabled tenants are limited in the type of property they can rent in the private sector, because they may need certain additional facilities, local authorities are able to consider the use of discretionary housing payments (DHP) to ensure that tenants can find decent accommodation that meets their need. The DHPs are entirely at the discretion of the local authority concerned, and are subject to annual cash limit. As they are administered by local authorities, the number of customers who may have applied for DHPs is not known. The provision of extra housing space for a disabled person with live-in carers is not automatically classified as a housing need or a social care need. The LHA rate that a disabled person is entitled to would be based on the number of people who occupy the property in the same way that it is for other people.18
A Parliamentary Question on Government expenditure on discretionary housing payments was answered in 2008:
Jenny Willott: To ask the Secretary of State for Work and Pensions (1) how much of the money allocated to each local authority to pay discretionary housing payments was unspent in each year since it was introduced; and if he will make a statement; [220088]
(2) how the amount allocated to each local authority for the payment of discretionary housing payments is calculated; and if he will make a statement; [220089]
(3) how much his Department allocated to each local authority for the payment of discretionary housing payments in each year since 2001; and if he will make a statement. [220090]
Mr. Plaskitt: The discretionary housing payment fund is allocated to each local authority based on the mid-point between the amount they were allocated and the amount they actually spent in the previous full financial year (e.g. the 2008-09 allocation was calculated using 2006-07 data, as this was the most recent full financial year data that was available at the time of calculation).
17 Work and Pensions Select Committee, Fifth Report of 2009-10, Local Housing Allowance, HC 235, March 2010
18 HC Deb 27 October 2008 cc 704 c144-5WA 9
10
Any remaining funding is then distributed across local authorities based on their annually managed expenditure, and their average rent restrictions. 50 per cent. of the remaining funding is allocated based on each local authority’s proportion of overall annually managed expenditure, and the remaining 50 per cent. of the funding is allocated based on each local authority’s average rent restrictions.
The available information on the amount of money allocated to each local authority for discretionary housing payments and the amount of such payments unspent for each local authority has been placed in the Library.19
19 HC Deb 29 September 2008 c2380W

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