Transition to work

Navigating the world of benefits and work

1. Understanding the interplay between employment and benefits is crucial for supported exempt accommodation providers. When residents find employment opportunities, it is essential to be aware of the implications on Universal Credit and Housing Benefit.

Employment milestones

2. It is always encouraging when a resident of working age in supported accommodation secures employment and takes a significant step towards financial independence.

Universal Credit and Housing Benefit

3. Employment is a positive step and residents who are still eligible for Universal Credit should continue to receive their full Housing Benefit entitlement. This ensures that their basic housing needs are met even as they transition into the workforce.

The earnings challenge in exempt supported accommodation

4. A significant challenge arises, however, when a resident’s earnings reach a point where they no longer qualify for Universal Credit. This scenario is becoming increasingly common, especially for single individuals without universal credit housing costs, given increases in the legal minimum wage. This negative consequence particularly targets those in exempt supported accommodation.

5. The consequence is a reduction in the resident’s supported accommodation Housing Benefit. They lose 65p in HB for every £1 of net earnings – less a standard earned income disregard. This earned income disregard is normally £5 for a single claimant but may be higher in certain circumstances.

Central Government’s response

6. Central government is not ignoring this issue. Several pilot schemes are currently being tested across the country to find viable solutions and mitigate the challenges faced by residents.

The role of Discretionary Housing Payments (DHPs)

7. One of the possible steps for residents transitioning to work and aiming for more stable housing is to apply for a Discretionary Housing Payment (DHP) through the Council. This temporary support, potentially for a duration of, say, six months, can be instrumental in their journey towards full-time employment and a permanent residence.

Understanding DHP eligibility

8. The primary condition for DHPs – in addition to entitlement to Universal Credit or Housing Benefit – is a need for “further financial assistance” to manage housing costs. ¹The Discretionary Financial Assistance Regulations 2001 Reg. 2(1)(b)   While the DHP legislation remains broad on this, the Department for Work and Pensions (DWP) provides its explanation of the provision.

9.  The DWP’s guidance states that:²DWP’s Discretionary Housing Payments guidance manual, paras 6 and 7

6. 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.

7. 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.

10. While facing “exceptional” circumstances or “hardship” is not mandatory, such conditions undoubtedly strengthen the DHP application.

Building bridges with the council

11. It’s not uncommon for the Council to be initially hesitant or even decline a DHP application. However, fostering relationships with key officers and members can be helpful. By highlighting the broader benefits of DHP payments, not just for the individual but also for the local community and economy, supported accommodation providers can advocate more effectively for their residents.

12. In conclusion, the role of providers of transitional supported accommodation for residents of working age extends beyond just providing accommodation. By understanding the nuances of employment and benefits, they can better support their residents in their journey towards independence and stability.