Discretionary Housing Payments - creating a Scottish scheme: equality impact assessment

Executive summary

Background

Originally published in February 2024, this version of the Equality Impact Assessment has been updated in light of a review of the DHP guidance manual for local authorities, concluded in March 2025. ß

Responsibility for the Discretionary Housing Payment (DHP) scheme was devolved in 2017 and provisions for reframing the scheme for a Scottish context were included in the Social Security (Scotland) Act 2018 (the “2018 Act”). The Scottish scheme for DHPs was established under Part 5 of the 2018 Act as of 1 April 2024, revoking the Discretionary Financial Assistance Regulations 2001 (“the DFA Regs”) as far as they applied to Scotland.

The Scottish Government provides LAs with funding to administer DHPs as it is they who are best placed to respond to the needs of tenants and local housing needs. LAs are able to consider the circumstances of each individual case when dealing with applications. DHPs support tenants who are in receipt of universal credit or housing benefit and are struggling with their housing costs.

The Scottish Government has been long committed to fully mitigating the bedroom tax through DHPs and, in January 2023, committed to mitigating the benefit cap as far as possible within devolved powers.

Creating a Scottish Discretionary Housing Payment (DHP) scheme brought DHPs in Scotland fully under control of Scottish Ministers, thereby enabling Ministers to use the scheme to more effectively reduce poverty, safeguard tenancies and prevent homelessness in Scotland.

A move away from the UK DFA Regs to the 2018 Act allows some of the flexibilities that the reframing of the scheme for Scotland was intended to create. In particular, the scheme allows flexibilities to reduce LAs administrative burden for the mitigations Ministers wish to see delivered in full (bedroom tax and benefit cap) by giving LAs more discretion over application processing.

The 2018 Act also gives flexibilities around the definition of housing costs which can be used to give LAs additional discretion to make larger payments in certain benefit cap cases, thereby more closely meeting Ministers’ wishes to mitigate the benefit cap in full.

Producing a Scottish statutory DHP guidance manual brought together all policy instruction from the Scottish Government in one place. The guidance is more specific about how the DHP scheme is used in Scotland and reduces ambiguity where the scheme’s intentions differ from that in the rest of the UK.

Colleagues from the Directorate for Tackling Child Poverty and Social Justice helped to develop sections of the guidance outlining how DHPs can help in the Scottish Government-Local Authority joint mission to tackle child poverty; one of three shared priority areas set out in the Verity House Agreement. The guidance describes the six priority family types and discusses some specific critical points where families may face increased financial pressure. We know that in Scotland 98% of all households hit by the benefit cap are families, and 74% are lone parent families. On average, the benefit cap takes away around £2,800 per household per year. Mitigating the benefit cap through DHPs will help around 3,000 families, with nearly 10,000 children, meet their housing costs.