Millions of households will soon be able to benefit from cash payments, rent support, food vouchers and more under a new scheme set to be launched by the Department for Work and Pensions (DWP).
From April, councils will be able to administer Labour’s new ‘Crisis and Resilience Fund’, designed to support low-income households at times when affording the essentials becomes a struggle.
This is a scenario many are facing, with recent research by the Trussell Trust finding that 14 million adults are going without food because they cannot afford it. At the same time, stubbornly high household bills mean many are finding it difficult to balance their finances.
The government has pledged £1 billion a year for at least three years to local authorities through the new fund. It will replace the Household Support Fund, which has previously had its continuation and exact funding confirmed yearly.
Responding to the funding, the Local Government Association welcomed the long-term commitment, but told The Independent in October that many councils do not feel it will meet local needs. While nearly two-thirds (63 per cent) surveyed said it would help to at least a small extent, just two per cent said that it will to a great extent.
On Tuesday, the DWP revealed more information about the scheme in guidance to councils, confirming what households across the UK can expect come April.
Alongside provision to bolster local support services, two new payments will be introduced under the fund: the crisis payment and the housing payment. These both serve different purposes, and will have different eligibility.
Crisis payment
The new ‘crisis payment’ – as it will be known across the UK – is designed to offer payments to “individuals in crisis,” the DWP said.
Like the Household Support Fund, councils will continue to have discretion over the exact eligibility criteria. However, the government’s guidance says it should not be limited just to those in receipt of benefits.
Authorities will use the crisis payment to support low-income households that have experienced a financial shock, or are at risk of entering crisis.
This could include people going without essentials like food, shelter or heating, or items like furniture and appliances. It covers the many reasons this could occur, such as disasters, health issues, theft, leaving an abusive relationship, or a gap in regular income.
The DWP has asked that councils take a ‘cash-first’ approach to the crisis payment, meaning cash payments should be awarded unless there is a fair reason not to do so. This could be in the form of food vouchers, or directly provided the required items.
A crisis payment is designed to meet occasional or short-term need, the department adds, and not become a supplement to regular income.
Some local authorities will also use the funding to provide parents of children eligible for free school meals with food vouchers over the summer.
Housing payment
A new ‘housing payment’ will also be introduced across the UK, aimed at providing financial support towards housing costs for those in need. It will replace the discretionary housing payment for claimants from April.
This will usually be related to rent, such as needing rent in advance, a rental deposit, or shortfall. It could also cover a lump sum associated with housing, like the cost of moving.
Unlike the crisis payment, the housing payment will be restricted to those in receipt of certain benefits. These are either housing benefit, or universal credit with the housing element for rental costs. However, DWP says those who do not qualify but are still in need could be considered for a crisis payment instead.
It will also have the scope to be longer-term, and paid more regularly. For instance, someone seeking work and currently facing a rental shortfall could apply for a regular housing payment until they are able to increase their income or find somewhere else to live.
A Government spokesperson said: “We’re committed to tackling poverty and delivering more security and opportunity for families across the UK.
“The £1bn multi-year Crisis and Resilience fund will help prevent households from falling into crisis by giving local authorities the certainty they need to provide emergency financial support.”
