Discretionary Housing Payments (DHP) Guide 2026/27: Who Can Apply and How

What Is a Discretionary Housing Payment?

A Discretionary Housing Payment (DHP) is extra financial help provided by local councils in England, Scotland and Wales to people who are already receiving Housing Benefit, or Universal Credit that includes a housing costs element, but who face a shortfall between that support and their actual rent.

DHPs exist because Housing Benefit and the Universal Credit housing element do not always cover the full rent someone pays -- particularly where policies like the bedroom tax, the benefit cap, or Local Housing Allowance caps in the private rented sector reduce the amount of help available below the actual rent charged.

Crucially, a DHP is:

• Discretionary -- there is no automatic entitlement, even if you meet the basic eligibility criteria
• Time-limited -- awards are typically made for a defined period, not indefinitely
• Locally administered -- your council decides applications and manages a fixed annual budget, so practice and generosity vary between areas
• Non-repayable -- unlike a loan, you do not have to pay a DHP back

Who Can Apply?

To be considered for a DHP, you must already be receiving one of:

• Housing Benefit, or
• Universal Credit that includes an amount for housing costs (the housing element)

On top of that, you need to demonstrate a genuine shortfall between the benefit you receive toward housing costs and your actual rent liability. Common situations where people apply include:

• Bedroom tax (spare room subsidy removal): working-age social housing tenants assessed as having one or more spare bedrooms have their eligible rent reduced for Housing Benefit or Universal Credit purposes
• Benefit cap: households whose total benefit income exceeds the cap have their Housing Benefit or Universal Credit reduced to bring them under the limit
• Local Housing Allowance (LHA) shortfall: private renters where LHA rates do not cover the actual rent charged, particularly in areas where rents have risen faster than LHA rates
• Temporary financial difficulty: a short-term gap while a household resolves a specific issue, such as moving to more affordable accommodation

How Councils Decide DHP Applications

Each council receives an annual government grant specifically for DHPs, alongside the ability to top this up from their own resources (within limits). Because the pot is fixed, councils have to ration awards, and typically consider factors such as:

• The size of the shortfall between benefit received and rent due
• Whether the household includes children, someone with a disability, or another vulnerability
• Whether the applicant is taking reasonable steps to resolve the underlying issue -- for example, looking for cheaper accommodation or seeking additional income
• Other income, savings and essential expenditure
• How much of the annual DHP budget remains

Because of this local discretion, two households in similar circumstances but different council areas can receive different outcomes. Some councils publish a local DHP policy setting out their priorities, which is worth reading before applying.

The Bedroom Tax and Benefit Cap Link

DHPs are the main safety net for two specific policy effects:

Bedroom tax (under-occupation deduction): working-age tenants in social housing who are assessed as having more bedrooms than the rules allow for their household size have their eligible rent for benefit purposes reduced by a percentage. A DHP can cover some or all of this reduction, particularly where suitable smaller accommodation is not available locally, or where the household includes someone with a disability requiring an extra room (for example, for medical equipment or an overnight carer).

Benefit cap: the benefit cap limits the total amount of certain benefits, including the housing element, that a household can receive. Where the cap reduces support below actual housing costs, a DHP can bridge some or all of the gap, though councils generally expect the household to be working toward an exemption (for example, through increased earnings that trigger the Universal Credit earnings-based exemption) rather than relying on DHP indefinitely.

How to Apply

Applications are made directly to your local council, not to DWP or HMRC. The general process is:

1. Find your council's DHP application form, usually available online through the council's website, sometimes alongside the Housing Benefit or Council Tax Reduction application pages
2. Complete the form, explaining your shortfall, your household circumstances and why you need support
3. Provide supporting evidence -- bank statements, tenancy agreement or rent statement, proof of benefit awards, and evidence of any disability or vulnerability
4. Submit before your circumstances worsen -- councils generally cannot award a DHP for a period before the application was made, so apply as soon as a shortfall arises rather than waiting until arrears build up

What Happens When an Award Ends

Because DHPs are time-limited, it is important to plan for what happens once the award period finishes. Councils often expect claimants to use the DHP period to:

• Look for more affordable accommodation, including a move to a smaller property if affected by the bedroom tax
• Increase household income, for example through more working hours, which can also help toward a benefit cap exemption
• Apply for other support, such as a Council Tax Reduction scheme, local welfare assistance schemes, or a Universal Credit budgeting advance

If your circumstances have not changed by the time the award ends, you can apply again, but repeated identical applications are less likely to succeed if the council expected specific steps to be taken and these were not.

If Your Application Is Refused

There is no statutory tribunal appeal route for DHP decisions, because the scheme is discretionary rather than a legal entitlement. If you are refused, options include:

• Asking the council for an internal review or reconsideration, providing further evidence if your circumstances have changed
• Contacting a local advice service (such as Citizens Advice) for help presenting your case
• As a last resort, raising a complaint about how the council handled the decision (not the decision itself) with the council's complaints process or the Local Government and Social Care Ombudsman

Sources

• gov.uk: Discretionary Housing Payments
• gov.uk: Housing Benefit
• gov.uk: Benefit cap
• gov.uk: Universal Credit and housing costs