Summary: Miss X complained the Council refused her application for discretionary housing payment. There was fault in the Council’s actions in the way it considered Miss X’s application, but this did not lead to an injustice. The Council also failed to refer Miss X to the welfare benefit team which caused her uncertainty. The Council agreed to apologise to Miss X and complete the referral to the welfare benefits team.

The complaint

1. Mr Y complained about the way the Council handled Miss X’s application for discretionary housing payments. Mr Y states the Council refused the application when it had previously approved it despite there being no changes to Miss X’s situation. Mr Y further complained the Council did not inform Miss X she must provide proof she needed a second bedroom until after the Council had rejected her appeal against the decision.

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The Ombudsman’s role and powers

2. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
3. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended)
4. If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

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How I considered this complaint

5. I read the documents provided by Miss X and I discussed the matter with Mr Y on the telephone.
6. I read the documents provided by the Council in response to my enquiries.
7. Mr Y and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

Discretionary Housing Payments

8. The discretionary housing payments (DHP) guidance manual is issued by the Department for Work and Pensions. It says a DHP may be awarded where a council considers a person needs financial support towards housing costs, and they receive the housing cost element of universal credit. The scheme is purely discretionary, a claimant does not have a statutory right to a payment.
9. The legislation governing the DHP scheme is the Discretionary Financial Assistance Regulations 2001 (as amended). The Regulations give councils broad discretion, but they have a duty to act fairly, reasonably and consistently. In reaching a decision they must consider the claimant’s financial circumstances and any other relevant factors.
10. When someone applies for a DHP they must provide details of their income, capital, expenditure, and any other information the council considers reasonably necessary. When a council makes an award, it is for a time limited period after which the person must reapply.

The Council’s policy

11. To establish if a person is eligible for an award the Council will complete a financial assessment. It works out if they have enough disposable income to pay the difference between their rent and the housing element of universal credit. The Council allows a single person a disposable income of £15 per week in its calculations. The Council’s policy says if eligible, the amount of the DHP awarded will usually be the difference between the rent and the amount of housing element a person gets.
12. If the financial assessment shows a person is eligible for DHP the Council will consider if they are a member of a priority group. The Council will consider people in priority groups for a longer-term award of 60 weeks. After the 60 weeks they must complete a review application to see if they need a continuous award. The two relevant groups for this complaint are where:
• an extra bedroom is used for an overnight carer; and
• a person is vulnerable and a move from their property would be detrimental to their health, mental wellbeing and personal safety.
13. When an application is unsuccessful the Council will send a letter to the applicant explaining the reasons they have not been awarded the DHP.
14. DHP are not subject to the statutory appeals route. The Council’s policy states where a person disagrees with the DHP decision they can seek a review. The Council will review the decision and if the decision is upheld it will send the applicant a letter which will state the reasons why.
15. The Council’s DHP procedure sets out how it calculates people’s income and expenditure, and the maximum amount it allows for each expenditure in a financial assessment. For a single person it sets the maximum amount for housekeeping at £79.70, which includes a maximum of £39.70 for gas and/or electric. If the person spends more than this amount on gas and electric the Council rounds it down to the maximum allowed amount.
16. The procedure states it can include medical expenditure within housekeeping, however if the person is not receiving other benefits for the medical needs, and it is not excessive, it should accept the extra amount.
17. When considering a Department for Work and Pensions (DWP) social fund loan the Council’s procedures states officers should; ‘ensure that there is clear evidence that the loan received was repayable and is being deducted from their welfare benefit payments’, before including it as an expenditure in the financial assessment. Where the Council is reviewing a DHP long term award it should contact the applicant and establish what the loan was for. If it was for an essential item, then it should include the repayment in the expenditure calculation. The Council treats an advance payment of universal credit in the same way as a social fund loan.

What happened

18. In November 2019 Miss X applied to the Council for a DHP. She provided information on her income and expenditure and supporting evidence that showed moving house would be detrimental to her health. The Council completed a financial assessment and identified that Miss X had a shortfall between the housing element of her universal credit and her eligible rent. It calculated she did not have enough disposable income to pay the shortfall herself. It assessed Miss X as being in a priority group based on the information provided. The Council decided to award DHP from October 2019 to the end of December 2020.
19. In December 2020 Miss X reapplied for a DHP. She provided information on her income and expenditure. The Council considered her application and identified Miss X’s income had increased since her previous application. The records show the Council did not include repayment of an advance payment of universal credit in Miss X’s expenditure as she had obtained it since she was last awarded DHP. It included expenditure of £10 for medical reasons and outgoings including water and home insurance. The assessment showed that although there was still a shortfall between the housing element of universal credit and her eligible rent, Miss X was now able to pay the shortfall out of her disposable income. The Council wrote to Miss X and informed her it decided not to award DHP because she had enough disposable income. It also stated Miss X could ask it to review the decision if she did not agree with it.
20. In January 2021 Miss X asked the Council to review her expenditure and its decision on her DHP claim. In February Miss X provided a GP letter to support her application and an updated income and expenditure form.
21. In March the Council reviewed its decision and considered the information Miss X provided. It recalculated her income and expenditure. It did not include £10 for medical expenses and stated it had included it within the housekeeping amount. It did not increase the housekeeping figure from the previous assessment. It did not include expenditure for water. The Council decided that Miss X had enough disposable income to cover the shortfall in her rent. The Council wrote to Miss X and told her it decided not to award the DHP as she had enough disposable income. The letter stated Miss X could ask it to review the decision if she disagreed.
22. Mr Y asked the Council to reconsider its decision on Miss X’s behalf and provided evidence of expenditure. He asked the Council to consider a payment for home insurance and £29 a month repayment of advanced universal credit in Miss X’s expenditure calculations. He stated that Miss X did not have any disposable income and he was having to provide her with money every month to meet her outgoings.
23. In April the Council wrote to Miss X and said it had reviewed the information Mr Y had provided and had included the home insurance in the financial assessment. It said it did not include the repayment and the assessment showed Miss X had enough disposable income to meet the shortfall in her rent. The Council stated that its decision had not changed and directed her to us.
24. Dissatisfied with the Council’s response Mr Y complained to us on Miss X’s behalf. He stated the decision was unfair and did not consider all the information provided.
25. In response to my enquiries the Council stated its calculations in March and April 2021 were incorrect as it did not consider Miss X’s water rates. However, it stated had it included the water rates it would not have changed the decision.
26. The Council stated that in reviewing the case it considered it could have referred Miss X to its welfare rights team to carry out a welfare benefits check, as she may have been entitled to a personal independence benefit payment.

My findings

27. The Ombudsman is not an appeal body. DHPs are discretionary but we will consider whether the Council followed Government guidance and its own procedures and whether it considered all relevant information when reaching its decision. Provided it did so, we cannot question the merits of the Council’s decision and we cannot substitute our view for that of the Council.
28. The Council’s initial assessment of Miss X’s income and expenditure showed her finances were different to the previous application and award of DHP. The records show the Council considered the additional information Miss X provided about her need for a second bedroom and her membership of a priority group before it made its final decision. This did not affect the outcome as the financial assessment showed Miss X was not eligible for DHP, which is the Council’s first consideration. There was no fault in the Council’s decision not to award the DHP.
29. The Council’s initial assessment and subsequent review of Miss X’s income and expenditure did not include a figure for the repayment of her Universal Credit Advance. The Council’s procedures states it should be considered as an expenditure if there is proof it is being repaid. There is no evidence the Council made any enquiries to find out if Miss X used the advance payment for an essential item as set out in its procedures. That was fault.
30. The Council also accepted that it did not include Miss X’s water bill in the expenditure. That was not in line with its procedures and was also fault.
31. There was inconsistency in the way the Council treated Miss X’s medical expenses. It calculated it as a separate amount in Miss X’s initial application and included it under housekeeping in the subsequent reviews which decreased her expenditure by £10. The inconsistency between the Council’s consideration was not in line with DHP guidance and was fault.
32. However, I do not find the faults caused Miss X an injustice. This is because if the Council included the advanced universal credit repayment, the water rates and the medical expenses, Miss X still would not have qualified for DHP.
33. The Council was aware that Miss X was struggling financially when she applied for DHP in December 2020. Mr Y reiterated this in March 2021 when he told the Council he was providing Miss X with money every month. The Council accepted it would have been good administrative practice to refer Miss X to the welfare benefits team to complete a welfare benefits check. Not doing so was fault and caused Miss X uncertainty as to whether she would have been entitled to further benefits.

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Agreed action

34. Within one month the Council will:
• write to Miss X and apologise for the uncertainty caused by failing to refer her to the welfare benefits team;
• complete the referral for Miss X for a welfare benefits check; and
• remind relevant staff of the importance of consistency in considering expenditure and to follow the procedure for considering universal credit advance payment recovery in financial assessments.

The Council will provide us with evidence it has done so.

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Final decision

35. I have completed my investigation. I found fault that led to injustice, and the Council accepted my recommendation to remedy that injustice.

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Investigator's decision on behalf of the Ombudsman