Welcoming increased benefit cap mitigation

The Scottish Government’s announcement this week of increased funding for discretionary housing payments (DHPs) to mitigate the benefit cap as fully as possible is hugely welcome. It follows work by CPAG in Scotland’s Early Warning System over many years to gather and share case evidence with government on how the cap was creating real hardship, using our social security expertise to show how it could be mitigated within devolved powers.

It is vital now that people affected by the benefit cap apply to their local authority as soon as possible and ask for a backdate to the beginning of this year. Information on how to apply is usually available on local authorities’ websites.

As with the ‘bedroom tax’ anyone applying for a DHP because they are affected by the cap, should now be awarded one.1 The Scottish government estimates this will help 4000 families with around 14000 children.2 We know from our work monitoring the impact of changes in the social security system on children and their families that this support is vital. The benefit cap reduces the amount of benefit a family can receive causing severe financial hardship and undermines the Scottish government’s efforts to reduce child poverty.

At CPAG in Scotland we have been monitoring the impact of the cap since its introduction in 2013 and, along with our UK colleagues, calling for it to be scrapped by Westminster. In the meantime, informed by case evidence gathered through our Early Warning System we called on the Scottish government to use DHPs to mitigate the benefit cap as fully as possible. We shared evidence about:

  • families whose UC is reduced who don’t meet the exemption criteria for the cap because their earnings fluctuate, sometimes just because of the way they are paid, or because someone in the household is waiting for an assessment for a disability benefit, in some cases for over a year, 
  • families who you might expect to be exempt but who are not, such as kinship carers, families who have recently escaped domestic abuse or who have recently been granted refugee status, and the devastating financial hardship of the cap on families who unable to pay their rent have been evicted from their home or have had to turn to foodbanks in order to feed their families, and 
  • different approaches by local authorities to mitigating the cap through DHPs resulting in a ‘postcode lottery’ of support depending on where families live.   

For example:

A lone parent requested a DHP to mitigate the benefit cap, but it was refused because her rent is paid direct to the landlord. The local authority determined that she did not need help with her housing costs despite having £700 a month deducted from her UC award because of the cap. #3395

A UC claimant who works 17 hours a week would be exempt from the benefit cap if she was paid monthly (she would receive £699, which is above the earnings exemption threshold of £658) but because she is paid weekly, in assessment periods where she only receives 4 weeks wages (£646), she falls below the earnings exemption threshold she falls below the earnings exemption threshold and the benefit cap is applied. DHPs were covering, but these have now stopped. #1452

Our case evidence, combined with our social security expertise allowed us to support Scottish government officials to turn our policy call into a deliverable reality. The challenge now is to ensure that as many families affected by the cap as possible get the help that they are entitled to. Please spread the word. It is important to note for some people in receipt of universal credit (UC), the DHP may not be as much as the UC is reduced by. This is because a DHP cannot be bigger than the housing element used to calculate the maximum UC award.

CPAG in Scotland’s second tier advice line for frontline advisers and support staff in Scotland can answer any queries you may have about the benefit cap, or any other benefit issues. It can be contacted on 0141 552 0552 or [email protected].

You can submit anonymous case studies to the Early Warning System online or by emailing [email protected]. We will use these case studies to inform and evidence our calls around the development and delivery of social security in Scotland and at UK level.

[1] DHP Guidance – Interim Guidance Note – Benefit Cap – December 2022.

[2] https://www.gov.scot/news/helping-families-with-their-living-costs/.