Guidance

Discretionary Housing Payments guidance manual

Updated 1 April 2026

Applies to Wales

© Crown copyright 2026

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This publication is available at https://www.gov.uk/government/publications/discretionary-housing-payments-guidance-manual/discretionary-housing-payments-guidance-manual

Including the Discretionary Housing Payments Good Practice Guide.

Section 1: manual purpose

1. This guidance manual is for local authorities (LAs) in Wales who are responsible for administering Discretionary Housing Payments (DHPs). The equivalent of DHPs in England is the Crisis and Resilience Fund Housing Payment strand. DHPs have been fully devolved in Scotland since 2017.

2. It provides guidance and advice on good practice when considering payment of DHPs and updates the previous guidance issued in May 2022.

Section 2: about Discretionary Housing Payments

What are Discretionary Housing Payments?

3. DHPs provide financial support towards housing costs and are paid by an LA when they are satisfied that a claimant needs further financial assistance with housing costs. These payments can be made to claimants who are entitled to either:

  • Housing Benefit (HB) or
  • Universal Credit (UC) with housing costs towards rental liability - this includes Shared Ownership properties which carry a rental liability

What we mean by ‘housing costs’

4. ‘Housing costs’ are not defined in the Discretionary Financial Assistance (DFA) Regulations 2001 and this approach purposely allows broad discretion for interpretation. In general, ‘housing costs’ refers to rental liability, as well as:

  • rent in advance
  • rental deposits
  • other lump sum costs associated with a housing need such as removal costs

What we mean by ‘further financial assistance’

5. The phrase ‘further financial assistance’ is not defined in law. LAs may interpret the phrase however they wish; taking into consideration the claimant’s financial circumstances and any other relevant factors.

6. However, in most cases, a claimant will need to demonstrate that they are unable to meet housing costs from their available income or that they have a shortfall in meeting their housing costs.

Section 3: funding

7. LAs can top-up their DHP allocation using their own funding. There is no limit applied to this amount. 

8. DHP funding may be used for:

9. DHPs may be made where the requirement for financial assistance does not arise from:

10. When the DHP is being considered for rent costs, it should not exceed the weekly HB or UC Housing element. Authorities should consider the Court of Appeal’s decision in R v. LB Lambeth, ex parte Gargett (see Annex A).

Awarding a DHP in UC

11. When processing an application from a UC claimant, consideration should be given to:

  • total monthly household income including the whole value of the UC award, less
  • total monthly household expenditure (which the Authority deem reasonable), equals
  • shortfall in income to consider for a Housing Payment award

Awarding a DHP to claimants that have 2 homes

12. A DHP can be awarded in respect of 2 homes when someone is treated as temporarily absent from their main home. This includes those who have fled their main home because they are a victim of domestic abuse. Further information can be found in the Housing Benefit Regulations 2006 (S.I. 2006/213) or Universal Credit Regulations 2013 (S.I. 2013/376) for the time restrictions on these provisions.

13. In such cases of temporary absence, if the claimant is treated as liable for rent on both properties and, in both cases, there is a shortfall, it is possible to award a DHP in respect of both properties subject to the weekly or monthly limit on each property.

Section 4: application process

14. The regulations require that there must be an application for a DHP before an LA can consider making a payment.

15. Each LA can decide how the application process will operate. If an LA decides not to use a paper form, other methods can be considered such as electronic, telephone, online application or face to face claimant interviews.

Information a claimant must provide

16. In order to apply for a DHP, the claimant must provide any information the LA needs to make a decision, for example, details of income, capital and expenditure.

17. When deciding how to treat income from disability-related benefits such as the Personal Independence Payment (PIP), LAs must have regard to the decision of the High Court in R v. Sandwell MBC, ex parte Hardy. This decision places an obligation on LAs to consider each DHP application on a case-by-case basis having regard to each component of the benefits in payment, the purpose of those disability related benefits and whether the money from those benefits has been committed to other liabilities associated with disability. See Annex A for more information.

Can another person make a claim on behalf of the claimant?

18. If reasonable in the circumstances, for example, if a claimant is vulnerable and requires support, an application can be accepted from someone acting on behalf of the claimant such as an appointee.

Awarding a DHP in UC

19. When processing an application from a UC claimant, consideration should be given to:

  • total monthly household income including the whole value of the UC award, less
  • total monthly household expenditure (which the Authority deem reasonable), equals
  • shortfall in income to consider for a Housing Payment award

Awarding a DHP to claimants that have 2 homes

20. A DHP can be awarded in respect of 2 homes when someone is treated as temporarily absent from their main home. This includes those who have fled their main home because they are a victim of domestic abuse. Further information can be found in the Housing Benefit Regulations 2006 (S.I. 2006/213) or Universal Credit Regulations 2013 (S.I. 2013/376) for the time restrictions on these provisions.

21. In such cases of temporary absence, if the claimant is treated as liable for rent on both properties and, in both cases, there is a shortfall, it is possible to award a DHP in respect of both properties subject to the weekly or monthly limit on each property.

Delivering the decision

22. You must inform the claimant of the DHP decision either in writing or electronically (if the claimant has agreed to this). This information should include appropriate explanations and/or any reasons for non-payment.

23. This must be done as soon as is reasonably practicable. LAs must be consistent and avoid unnecessary delay, considering that an application for DHPs is often to deal with an immediate need.

Review process

24. When issuing a decision, LAs should provide information about the process in place for reviewing the decision.

25. An LA may decide who in the authority reviews a decision. There is no requirement that the review arrangements take any format as long as the authority is consistent and the original decision maker is not involved.

26. A decision on a DHP does not carry a right of appeal to a Social Security Tribunal. The route of judicial review is available; and a complaint may be made to the Local Government and Social Care Ombudsman if there is an allegation of maladministration.

27. The claimant should be notified of any review outcome in writing, including reasons, as soon as is reasonably practical.

Section 5: payment of DHPs

Method of payment

28. DHPs may be delivered through HB payment systems and may also be paid alongside HB payments. There must be a clear audit trail that allows LAs to differentiate between HB and DHPs.

29. If a DHP is paid with HB, notifications to the claimant must clearly show the amount of HB and the amount of DHP.

30. When a DHP is awarded to a UC claimant, LAs may align with UC schedules.

31. Payments may be made to third parties (such as agents, appointees and landlords) where appropriate, with fraud risk considered.

32. In the case of a person who is entitled to a rent rebate, the DHP can be credited to the rent account.

Payment duration and backdating

33. DHPs may be paid in multiple instalments. The duration of the DHP is determined by the LA. The award period and any end date should be clearly communicated to the applicant for ongoing awards. For one-off costs (such as, deposit or rent in advance), specifying a period is not required.

34. LAs have the discretion to backdate DHPs. When deciding whether to backdate, each application should be considered on its own merits. The DHP can only be considered for a period where the linked HB or relevant award of UC is payable.

Section 6: changes

Change of circumstances

35. Applicants must notify the LA of any changes which may be relevant to the DHP application or award. LAs should inform DHP recipients of what changes to report and how to do so. There is no statutory timescale, but prompt notification is encouraged.

Stopping DHP payments

36. There are instances when a DHP can be stopped before the end date already indicated to the claimant: These are if:

  • the LA decides that a DHP is being, and/or has been, made because a claimant has misrepresented or failed, fraudulently or otherwise, to disclose a material fact
  • the claimant has been paid because of an error
  • a claimant no longer needs further financial assistance towards housing costs 

Recovering overpaid DHPs

37. The DFA regulations state a DHP award can only be recovered if your LA decides that payment has been made because of either:

  • a misrepresentation or failure to disclose a material fact by the claimant (either fraudulently or otherwise)
  • an error made when the application was determined

Section 7: budgeting

38. As the DHP scheme has been in place for some years, LAs are likely to have built up expertise and local knowledge; enabling the DHP budget to be profiled to meet demand over the course of the year.

39. You may want to explore what other funding is available for providing assistance in your local area where there may be some overlap with DHPs in what it can be used for, such as help with removal costs.

40. You may also be able to reduce some demand by offering claimants alternative support and advice in advance of considering whether a DHP is appropriate, this may include support through the Money and Pensions Service.

Section 8: Department for Work and Pensions monitoring

41. Since April 2013, the Department for Work and Pensions (DWP) has monitored how DHPs are being used to support claimants affected by the Welfare Reforms. This monitoring information continues to improve the department’s understanding of how DHPs are being used.

42. The department requests information on DHPs at specific times during the financial year, including expenditure and number of awards.

43. Some of this information, such as the financial forecast and actual expenditure at mid-year and end of year, is mandatory. Other information is voluntary.

DHP mid-year estimate and final claim forms

44. The Discretionary Housing Payments (Grants) Order 2001 (S.I. 2001/2340), amended by The Income-related Benefits (Subsidy to Authorities) and Discretionary Housing Payments (Grants) Amendment Order 2021 (S.I. 2021/2031), places a legal obligation on LAs to submit forms providing details of DHP expenditure within a financial year.

45. 2 forms must be submitted each financial year; a mid-year estimate form by 31 October and a final DHP claim form by 30 April of the following year. LAs is required to complete and return the forms to the department by the required deadline.

46. In addition to providing details of DHP expenditure, the forms also ask LAs to report voluntary monitoring information.

47. The mid-year estimate and final DHP claim forms are the mechanism by which DHP funding is provided to LAs. The forms contain an LA certificate which must be signed by the Responsible Finance Officer within each LA who is designated as such under Section 151 of the Local Government Act 1972. The Responsible Finance Officer must certify that all entries on the forms are accurate and expenditure has been incurred in accordance with this guidance and the regulations governing DHPs.

48. The deadline of 30 April for the final DHP claim form is a critical deadline across government as it allows for faster closure of accounts as required by HM Treasury.

Section 9: publicising DHPs

49. It is important to publicise the existence of DHPs. They are a key element of the government’s support for housing costs and are an important tool to support people experiencing temporary pressure or in enabling a move to more sustainable and affordable accommodation.

50. We recommend that LAs point to the availability of DHPs when contacting claimants who are due to be potentially affected by a particular deduction or shortfall.

51. To raise awareness of DHPs, your LA may wish to consider:

  • including information on all HB decision notices where there is a shortfall
  • leaflets and posters
  • giving advice on DHPs when people contact your LA to discuss a claim
  • proactively assisting vulnerable claimants to make applications by, for example, visiting them in their own homes
  • ensuring that domestic abuse victims who are trying to move to a place of safety through contact with external welfare organisations and refuges are supported
  • informing external and internal bodies that give advice (money advice, welfare rights, homelessness, housing, etc.) of the existence of DHPs
  • establishing and maintaining links to ensure awareness of the scheme among staff working in housing options, homelessness and adult and children’s services
  • including DHP advice as part of general welfare advice services
  • making landlords aware of the scheme (private landlords, housing associations and registered providers)
  • establishing links with social housing tenants and resident’s organisations to ask them to help raise awareness of the scheme
  • raising awareness by having information of the scheme available at tenants and residents’ forums
  • including clear DHP eligibility requirements, application and appeal information on your LA website, ensuring it is visible and easily accessible to both HB and UC claimants
  • information on Choice Based Lettings scheme websites
  • information within literature or communications relevant to housing allocations policies or placements
  • raise awareness through interviews with local radio, including stations targeting different ethnic groups
  • targeted communications aimed at those likely to be affected by telephone, text message or social media (such as X)

Section 10: working with other LAs

52. It may be helpful to consider working with neighbouring LAs if claimants could be more likely to find accommodation in another area.

53. The LA that the claimant is leaving is responsible f or providing the DHP.

54. In the event of a claimant moving from one LA to another, it is advised that discussions should take place between the LAs and other departments regarding the possible increase in demand of services, for example school places or social services support.

55. LAs should be aware and trained to recognise when a claimant approaching for DHPs is legally homeless or threatened with homelessness which may trigger duties the Authority must undertake separately.

Annex A: R v. LB Lambeth, ex parte Gargett

1. The Court of Appeal’s decision in ‘R v. LB Lambeth, ex parte Gargett’ sets out that any HB already paid towards ‘housing costs’ must be deducted when calculating the amount of a DHP to avoid duplicate provision.

2. This case relates to rent arrears and specifically whether a DHP could be used to pay a lump sum towards rent arrears (the Court of Appeal found that a DHP could be used for this purpose). However, the case also discusses the issue of duplication of DHPs and HB. In relation to preventing duplication of provision, part of the decision states ‘housing benefits already paid for past housing costs must also be deducted. This is implicit in the purpose for which DHPs may be made. Otherwise, the applicant would be receiving DHPs for housing costs that have already been met by past payment of housing benefits. It would not be a case for a need for ‘further’ financial assistance to meet ’housing costs’.

3. The case does not prevent the use of a DHP for rent in advance but indicates that when making such a decision on whether DHP can be used, you may consider whether there is likely to be a duplication of payments for the initial part of the tenancy if the DHP is made and if so, is there any means to avoid this.

4. If an LA decided that there is no way to avoid a duplication of the payment and the claimant is entitled to a DHP in respect of housing costs (specifically a rent in advance payment), then the LA may still award a DHP.

5. The DFA regulations require that a DHP can only be considered for a period where the linked HB or relevant award of UC is payable. This is of particular relevance to requests for a period of backdated DHP, since backdating cannot cover arrears accrued while not in receipt of these benefits. The case relates to rent arrears and specifically whether a DHP could be used to pay a lump sum towards past rent arrears.

6. The Court of Appeal found that there was no restriction within the DFA regulations to prevent an LA from exercising its discretion to make DHP payments for past housing costs (including arrears of rent) on the basis that the claimant was in receipt of full HB at the time.

R v. Sandwell MBC, ex parte Hardy

7. When deciding how to treat income from disability-related benefits such as Disability Living Allowance or PIP, LAs must have regard to the decision of the ‘High Court in R v. Sandwell MBC, ex parte Hardy’.

8. This decision places an obligation on LAs to consider each DHP application on a case-by-case basis having regard to each component of the benefit, the purpose of those disability related benefits and whether the money from those benefits has been committed to other liabilities associated with disability.

Annex B: case studies

DHPs for claimants affected by the benefit cap:

1. Mr. and Mrs. Smith rent a 3-bedroomed property and are subject to the benefit cap. They have 2 children, reside in Greater London and receive the following benefits:

  • Child Benefit
  • Universal Credit:
    • Standard allowance
    • Housing element
    • Child element

2. Mr. Smith has been unemployed for some time and has found it difficult to find employment in his usual vocation; he attends the Jobcentre regularly for support from his work coach.

3. Due to the length of time he has been out of work, Mr. Smith has built up rent arrears and has received help with budgeting and finances. An Alternative Payment Arrangement to pay his rent direct the landlord has been put in place and he is applying for a Housing Payment.

4. In addition, Mr. and Mrs. Smith’s oldest child is 15 years old and in the process of completing her GCSEs. Mr. and Mrs. Smith have found a cheaper property that would take them below the benefit cap in another area but it would mean their oldest child would have to move schools. They believe this would have a negative impact on their child’s education.

5. The maximum payment for an ongoing award may not exceed the UC housing costs element. However, consideration needs to be given to the amount of any shortfall in income, so an LA may decide to award a weekly Housing Payment until Mr. and Mrs. Smith move into work or their oldest child completes her GCSEs.

DHPs for claimants affected by Removal of the Spare Room Subsidy:

6. Mr. and Mrs. Thom rent a 4-bedroom house from a registered housing provider. They have 2 children, a girl of 7 and a boy of 5. They receive the following benefits:

  • Child Benefit
  • Universal Credit:
    • Standard allowance
    • Housing element
    • Child element
    • Carers element
  • Limited Capability for Work and work related activities element
  • Carers Allowance
  • PIP

7. Under the size limit rules, they are considered to be under-occupying the house by 2 bedrooms as the children are both under 10 years old and would be expected to share a room. As the Thom’s are under-occupying by 2 bedrooms, a 25% reduction would be applied to the eligible rent.

8. Mrs. Thom is a wheelchair user and significant adaptations have been made to the property to make it more accessible following the receipt of a Disabled Facilities Grant. If the family moved to a smaller home, that property would need to be adapted at considerable expense.

9. Mrs. Thom applies for a Housing Payment and provides evidence to show the level of UC Housing element she receives and also her rental contract from her housing provider to show the amount of rent due. An award should be considered to enable the family to meet their rental liability in full and remain in their current adapted house.

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