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7 February 2018updated 28 Jun 2021 4:39am

How an obscure court battle could decide the fate of thousands of families

The government is trying to enforce a benefits cap while cutting funding for Discretionary Housing Payments.

By Polly neate

In May 2017, Parliament’s Work and Pensions Committee warned that the benefit cap was “starting to bite”. This was something of an understatement. The cap, which imposes an arbitrary limit on the amount of benefits a household can claim, is £20,000 a year outside of London and £23,000 in the capital.

The government is currently fighting to uphold the policy in the Court of Appeal, after the High Court ruled that it discriminates against single parents with children under the age of two. Giving his verdict, Mr Justice Collins said the cap caused “real misery… to no good purpose”. The fate of thousands of families now hangs in the balance as the Court of Appeal judges weigh up the government’s case.

The heart of the government’s defence is the fact that discretionary housing payments (DHP) remain. These are extra funds given to councils to help renters on housing benefit in severe financial difficulty. But in a move that undermines its own defence, the government last month cut DHP funding for the benefit cap in England and Wales by 20 per cent.

Funding will fall from £67.5m this year to £54m in April 2018.Yet the number of households affected by the cap has dramatically increased: since the cap was lowered in 2016, the caseload in England and Wales has tripled to 59,264 households, according to the most recent figures.

We know that councils already ration DHP, and now they will have less money for more people. In other words, it will be even harder to protect families from homelessness with all the desperation and harm it brings. 

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Last year, a homeless mother with infant twins and two older children, who was hit by the benefit cap, came to Shelter. She had been in an abusive relationship where her partner, as part of his financial abuse, had accumulated £4,000 in rent arrears in their previous property. Arrears that she was still paying off after losing her home.

The temporary accommodation (TA) where she was housed by the council was far more expensive than she could afford on her capped housing benefit of £88 a week. It was a hard fight, but Sally successfully made her case for a Discretionary Housing Payment and secured at least a few months’ reprieve from a terrifying downward spiral of debt. Now things could be about to get even harder for many thousands of mothers like her.

A 20 per cent reduction in one year shows how full of holes the DHP safety net is and just how quickly it can be pulled from under a struggling family’s feet. Frankly, the government’s defence of the benefit cap is demonstrably inadequate. It should be nowhere near strong enough to overturn the High Court’s judgement. We are fervently hoping that the Court of Appeal will agree with us on this.

Polly Neate is the chief executive of Shelter.