The Department for Work and Pensions (DWP) has set out comprehensive new guidance for a major support scheme designed to help millions of households facing financial hardship. The new 'Crisis and Resilience Fund' is scheduled to launch in April 2026, replacing the previous Household Support Fund with a longer-term commitment of £1 billion a year for at least three years.
Two New Payments to Tackle Financial Hardship
Revealed in guidance to local councils on Tuesday 13 January 2026, the fund will introduce two distinct forms of direct support: the crisis payment and the housing payment. These are aimed at providing a more structured safety net for low-income families and individuals across the UK, many of whom are still struggling with stubbornly high bills and the rising cost of essentials.
Recent research by the Trussell Trust underscores the urgency, finding that 14 million adults are going without food because they cannot afford it. The new fund is the government's response to this ongoing crisis.
Understanding the New Crisis Payment
The new UK-wide crisis payment is designed to offer swift financial assistance to individuals facing an acute crisis. Crucially, applicants will not need to be claiming benefits to qualify, broadening the scope of help available.
Local authorities will have discretion but are instructed to support low-income households that have experienced a financial shock, such as:
- Going without essentials like food, heating, or shelter.
- Dealing with the aftermath of a disaster, theft, or health issue.
- Facing a sudden gap in income or leaving an abusive relationship.
The DWP has mandated a 'cash-first' approach, meaning direct cash payments or vouchers should be the default to meet these short-term needs, rather than becoming a regular income supplement. Some councils will also use this part of the fund to provide summer food vouchers for children eligible for free school meals.
How the New Housing Payment Will Work
Separately, a new housing payment will be introduced to provide targeted support for housing costs, replacing the discretionary housing payment from April 2026. This support can cover:
- Rent in advance or rental deposits.
- Shortfalls in rent payments.
- Lump sums associated with moving costs.
Unlike the crisis payment, the housing payment will be restricted to those receiving housing benefit or Universal Credit with the housing element. However, the DWP states those in need who do not qualify could be considered for a crisis payment instead. This support can be longer-term, offering regular payments to someone, for example, seeking work while facing a rental shortfall.
Local Reaction and Future Implementation
While the Local Government Association has welcomed the multi-year funding commitment, it has expressed concerns about whether the allocated amount will meet soaring local demand. A survey in October found that while 63% of councils believed the fund would help to some extent, only 2% felt it would do so to a great extent.
As April 2026 approaches, local authorities across the UK will finalise their local eligibility criteria and application processes for these two new payments, which represent a significant evolution in the state's cost of living support framework.
