DWP launches new cash payment scheme from April - are you eligible?

Ministers say the long-term commitment will give local councils greater certainty when responding to sudden financial hardship, and help people cope with the cost of living crisis.

Support will be available regardless of whether applicants currently receive benefits.

The Government say cash payments are intended to reduce reliance on emergency food aid and provide families with greater choice.

Employment Minister Dame Diana Johnson said: "Thanks to this £1billion fund local authorities will have the certainty to provide emergency support and stop families falling into crisis in the first place".

Guidance issued by the Department for Work and Pensions (DWP) sets out three distinct strands for the fund.

The first strand provides crisis payments for households affected by sudden income loss or unexpected expenses.

The second strand covers housing payments designed to help tenants manage shortfalls in rent.

The third strand focuses on resilience services that support frontline charities and community organisations.

Applicants will be able to seek help for circumstances including job loss, fleeing domestic abuse, or facing an unforeseen cost such as a broken boiler.

Councils will retain discretion over how funding is divided between the three strands, with no fixed requirements on the proportion of spending allocated to each category.

Discretionary Housing Payments have been absorbed into the new scheme, and this support will relaunch as the housing payment element of the Crisis and Resilience Fund.

In urgent cases, councils are expected to release funds within 48 hours of receiving an application.

Both the crisis payment and housing payment strands will operate throughout the year.

Charities have welcomed the shift towards direct cash support.

Emma Revie, co-chief executive at the Trussell Trust, said: "The new Crisis and Resilience Fund is a vital step towards ensuring no-one is forced to turn to a food bank to get by".

Richard Lane, chief client officer at StepChange Debt Charity, said the scheme would support people facing financial crisis.

Mr Lane described the long-term funding commitment as "a big step forward and a vital foundation to support local areas to build joined-up support for people experiencing difficult life events and financial crisis".

Barnardo’s chief executive Lynn Perry said the guidance set out "how crisis support can be delivered in a way that protects dignity, offers real choice and reaches those who need it most".

Despite the positive response from charities, concerns have been raised by local authorities about whether the funding will be sufficient.

A survey conducted by the Local Government Association (LGA) found that just two per cent of councils believe the funding will meet welfare needs in their areas.

The funding level remains broadly unchanged from the Household Support Fund.