Tackling child poverty delivery plan 2022-2026 - annex 5: impact of policies on child poverty

Benefit cap support through discretionary housing payments (DHPs)

This policy aims to provide support to households whose benefit entitlements have been reduced by the benefit cap. The same benefit cap level is applied to both families and couples without children, meaning families suffer more stress due to higher costs.

• Income from social security and benefits in kind

Enhanced life chances (e.g. health, wellbeing, capabilities, longer term goals)

Potential size of impact

We know that around 97% of the households impacted by the cap are families with children, with lone parent families disproportionately impacted, losing an average of £208 per month as of August 2021.

Type of impact

Discretionary housing payments (DHPs) are distributed by local authorities to households in receipt of housing benefit, or the housing element of Universal Credit who are struggling with housing costs. Benefit cap mitigation is one of the permitted uses of DHPs.

Certainty of impact

DHPs would directly support households with the cost of housing where their benefits have been capped. Data from DWP (Department for Work and Pensions) on the effect on eligibility of the removal of the £20 per week uplift to universal credit is not yet available so exact estimates of numbers of houses capped is not yet possible.

Priority families targeted by policy:

• Lone parents

DHPs are distributed by local authorities where benefit caps have resulted in struggles to pay housing costs. The policy could affect any of the priority family groups, though chiefly lone parents who account for 68% of eligibility. There will need to be work with local authorities on their processes of identifying eligible households and getting payment to them.

Tracking progress

At present local authorities do not return data on the recipients of DHPs, just on their spending against the funding streams of DHPs (bedroom tax, benefit cap, local housing allowance assistance, and core purposes). We will look to improve their level of reporting.