DWP issues cost of living payment rules for households after March | Personal Finance | Finance
DWP is launching a Crisis and Resilience Fund to support households from 1 April (Image: Getty)
The Department for Work and Pensions (DWP) has confirmed that new cost-of-living payments will be rolled out to eligible households in England from March onwards.
A new Crisis and Resilience Fund (CRF) will be available to local authorities across England from 1 April to support low-income households in the new tax year. Councils will receive funding totaling £1bn to cover the period from 1 April 2026 to 31 March 2029, and the new funding will replace the DWP’s existing Household Support Fund, which will expire on 31 March. The DWP said the new scheme would bring Discretionary Housing Payments together into a single, streamlined grant and that the new simplified approach would help reduce the administrative burden on councils and ensure families can access the support they need when they need it.
Under the new rules, municipalities have been advised to prioritize digital or physical cash payments, including bank transfers or cash cheques, via PayPoint, Post Office and ATMs, and these can be used to assist households with food, housing, energy, furniture and transport costs, among others.
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This marks the first time a multi-annual agreement for crisis support will be put in place; This allows councils to plan ahead, replacing the cliff-edge annual funding cycle of previous years.
According to the government, this will allow the fund to act as “a real safety net to prevent families falling into poverty” and will come alongside other initiatives, including the expansion of free school meals and free childcare hours, and legislation to remove the two-child limit for families claiming Universal Credit.
From April, every unitary authority and county council in England must offer a CRF Crisis Payment scheme, offering payment support to low-income households or individuals experiencing a “financial shock” such as a sudden, unexpected expense or drop in income, to prevent them from falling into “crisis”.
The DWP said: “There is no prescriptive list specifying eligible expenditure for Crisis Payments; it is at the Authority’s discretion to determine appropriate support, taking a person-centred, needs-based approach. However, this may include awarding a Crisis Payment to support:
Water used for drinking, washing, cooking, as well as for sanitary purposes and sewage
Period and hygiene products such as soap and toothpaste
Energy for any fuel used for heating, cooking or lighting in the home, including oil or portable gas cylinders
clothing, including uniforms, warm winter clothes and shoes
basic furniture and appliances such as beds and bedding, washing machines, window coverings and carpets, refrigerators-freezers and ovens
Essential transportation-related expenses, such as car repairs, buying bike or bus tickets, or paying for fuel
digital and connectivity essentials such as broadband or phone bills.
The fund will support a wide range of low-income households and will not be limited to welfare recipients. Councils will have the flexibility to apply their discretion when determining eligibility for Crisis Payment schemes, with funding to be distributed through a needs-based approach.
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Sabine Goodwin, Director of the Independent Food Aid Network, said: “The eagerly awaited Crisis and Resilience Fund will be groundbreaking for low-income households in English local authorities.
“The newly published guidance outlines the provision of effective crisis support through priority cash payments, ensuring choice and dignity, as well as the need to help residents build financial resilience through strengthened community support.
“Taking a cash-first approach to poverty, this multi-year funding pot has the capacity to reduce the number of people forced to turn to charity food providers and help deliver on the Government’s commitment to end mass reliance on emergency food parcels.”
