The Department for Work and Pensions (DWP) has confirmed a major overhaul of emergency welfare support, with a new permanent fund set to launch in April 2026. The £1 billion a year Crisis and Resilience Fund will replace the temporary Household Support Fund, aiming to provide faster and more flexible help to millions facing sudden financial hardship.
A Cash-First, Needs-Led Approach
Under the new system, local councils across England and Wales will be granted significant powers to issue direct 'crisis payments' to residents struggling to afford essentials. This support is designed to cover urgent needs like food, energy bills, or emergency repairs. In a crucial shift, eligibility will not depend on whether someone is currently claiming benefits, broadening the safety net significantly.
Government officials describe the fund as 'cash-first and needs-led', intended to help households weather unexpected shocks such as job loss, a broken boiler, or a sudden drop in income. The scheme also introduces a new Housing Payment, which will take over from Discretionary Housing Payments (DHPs) to assist with rent arrears and other housing costs.
From Temporary Fix to Long-Term Safety Net
Ministers state the reform will create a clearer, long-term framework, moving away from a patchwork of short-term schemes. New guidance mandates that councils must operate both crisis and housing support year-round, with a target to deliver emergency aid within 48 hours of an urgent application.
Richard Lane, chief client officer at StepChange Debt Charity, hailed the potential of the fund to be 'transformative' for those on the brink of serious financial difficulty. A council leader also welcomed the permanence, stating it would provide a vital lifeline and allow for better long-term planning compared to the expiring Household Support Fund.
Concerns Over Funding and a 'Postcode Lottery'
Despite the broad welcome, significant concerns persist about the level of funding and its distribution. A recent Local Government Association survey found that only 2% of councils believe the allocated money will meet local welfare needs to a great extent. Many warn that demand will continue to outstrip available resources.
Some local authorities have also raised fears about the transition from the old fund and the risk of a 'postcode lottery' if the new funding is not managed carefully and equitably across different regions.
The DWP says the fund marks a strategic shift towards a more preventative welfare model, aiming to stop crises from escalating. Councils will be able to use part of the funding for resilience-building support, including debt advice and money management help. The department has pledged close oversight and data sharing with local authorities to ensure the money is used effectively.
