Guidance

S9/2019: Additional new burdens funding to meet the costs of implementing welfare reform changes in 2019 to 2020

Updated 27 November 2019

Applies to England and Wales

Who should read

All Housing Benefit staff

Action

For information

Subject

Additional new burdens funding to meet the costs of implementing welfare reform changes in 2019 to 2020

Guidance manual

The information in this circular does not affect the content of the Housing Benefit guidance manual.

Queries

If you have any queries about the:

• general or technical content of this circular, contact hddchange.managementoffice@dwp.gsi.gov.uk
• payments, contact hb.nonsubsidy@dwp.gsi.gov.uk
• distribution of this circular, contact housing.correspondenceandpqs@dwp.gsi.gov.uk

Introduction

1. This circular is to inform you of additional funding of £22million that will be allocated to local authorities (LAs) to support the costs of implementing welfare reform changes in 2019to 2020.

2. The funding is intended to meet new burdens incurred by LAs as a result of the ongoing implementation of the following areas of welfare reform:

• Discretionary Housing Payment (DHP) administration and existing welfare reform funding including:
  • changes to Local Housing Allowance (LHA)
  • removal of the spare room subsidy (RSRS)
• the limitation of temporary absence outside Great Britain (GB) to 4 weeks
• restricting migrant access to benefits
• removal of assessed income periods
• benefit cap
• limiting support to 2 children
• transition to Universal Credit (UC) housing payment
• other UC new burdens including:
  • UC management activities
  • housing expertise and complex cases
  • movement from Housing Benefit (HB) to UC
  • debt migration

3. Funding for UC implementation support for 2019 to 2020 allocations are based on the estimated volume of movement from HB to UC and reflects the level of resource required to administer these cases.

4. The UC Programme commissioned Housing Delivery Division’s, Performance Development Team, to examine the administrative costs resulting from the transition from HB to UC Full Service (UCFS). The findings from this examination resulted in an overall increase in the amount of funding for UC new burdens for 2019 to 2020. A further cost refresh is to be undertaken in spring 2019.

5. The funding is to cover an increase in LA costs for HB cases and does not support Local Council Tax Reduction. The funding for council tax related expenditure is administered by The Ministry of Housing, Communities and Local Government and the Devolved Administrations.

Funding and payments details

6. In order to provide transparency, a breakdown of the total funding is given below and detailed in Annex A.

Area of activity	Funding distribution relates to or supports	Funding
DHP administration	England and Wales: This new burdens funding relates to the costs incurred by LAs in administering the DHP scheme. It also includes the ongoing costs of implementing welfare reform changes including LHA changes and RSRS. It is allocated based on HB caseload, the caseload of UC claimants receiving housing costs where LAs incur costs and the number of those caseloads impacted by welfare reform. Scotland: This new burdens funding relates to the ongoing costs of implementing welfare reform changes including LHA changes and RSRS. DHPs for Scottish LAs were devolved from 1 April 2017 and the Scottish Government will communicate directly regarding the costs of administering their DHP scheme for 2019 to 2020.	£10.6 million
Limitation of temporary absence outside GB	This new burdens funding supports LAs with the estimated additional costs incurred due to the time claimants may be absent from GB reducing from 13 weeks to 4 weeks, having their HB claim closed and later reapplying. The funding has been allocated to LAs based on the 2019 to 2020 HB forecasts used in calculating the HB administrative subsidy.	£0.4 million
Restricting migrant access to benefits	This new burdens funding relates to the additional costs associated with migrant access to benefits regulations. The funding has been calculated and allocated looking at the proportion of the HB forecast in each LA in 2019 to 2020 which is used for calculating the HB administrative subsidy.	£0.4 million
Assessed income period (AIP)	This new burdens funding relates to the costs incurred by LAs associated with AIP. The funding has been calculated by estimating the target group using Single Housing Benefit Extract (SHBE) estimates of the ‘65 and over’ HB caseload by LA. The funding is allocated based on this percentage profile.	£0.5 million
Benefit cap	This new burdens funding relates to the extra costs of implementing the benefit cap regulations. The funding has been allocated to LAs based on the expected benefit cap caseload under HB and UC, taking into account the forecast rollout of UCFS to LAs in 2019 to 2020.	£7.3 million
Limiting support to 2 children 2019 to 2020	This new burdens funding is to support LAs deliver the regulations relating to limiting support to 2 children. This funding is based on a forecast volume of 60,000 cases in 2019 to 2020, which is allocated to each LA based on the forecast caseload of HB claimants with 3 or more dependent children in 2019 to 20.	£0.6 million
Transition to UC housing payment	This new burdens funding is to support LAs with the cost of an estimated 46,0000 cases which are expected to move from HB to UC in 2019 to 2020. This new burden uses the standard unit cost for a change in circumstance for each move to UC. .	£1.5 million
Other UC new burdens
UC management activities	This new burdens funding reflects the additional management costs associated with UC implementation and is allocated to LAs based on expected HB caseload and current UCFS rollout schedule.	£7 million
Housing expertise and complex cases	This new burdens covers the additional administrative cost of providing advice and support for claimants with complex needs, for example, preventing unmanageable debt or homelessness and is allocated to LAs based on expected HB caseload and current UCFS rollout schedule.	£1.7 million
Movement from HB to UC	This new burdens funding reflects the additional costs incurred by LAs moving claimants from legacy benefits to UC. Following a review of UC new burdens this level of funding has been increased to reflect multiple stop notices. The funding is allocated to LAs based on expected HB caseload and the current UCFS rollout schedule.	£6.9 million
Debt migration	This new burden funding covers the additional administrative cost of transferring details of claimant HB debt to the Department for Work and Pensions and is allocated to LAs based on expected HB caseload and current UCFS rollout schedule.	£2.7 million

7. This funding is intended to meet the identified costs arising from the implementation of the above measures in 2019 to 2020.

Additional known and future new burdens funding

8. The new burdens funding for the following welfare reform have already been notified:

• mixed age couples
• severe disability premium and Pension Credit child addition

9. This is not exhaustive and there may well be additional policies generating the need for further new burdens payments as the year progresses. LAs will be informed as soon as this information is available.

Key points

10. Each element of the funding has been distributed amongst LAs on a basis that reflects the likely distribution of costs, as indicated in the table above. The aggregate allocations are included in the attached Annex A.

11. Each LA will receive their allocations in the week commencing 8 April 2019.

Annex A

Allocation of funding

Allocation of additional funding for Universal Credit