Welfare reform, economic pressure and the housing professional's role

Marking the launch of the annual Help with Housing Costs handbook, co-author and CIH policy lead Sam Lister reflects on why specialist knowledge matters more than ever, and what the latest welfare reforms mean for the people housing professionals support every day.

Financial pressure rarely arrives in isolation and that is certainly true in 2026. The broader economic picture – rising costs shaped in part by shifting geopolitics and volatile energy markets – means household finances across the income spectrum are stretched in ways that may have seemed unlikely a few years ago. More people need help, and more people are entitled to support they may not know they can access.

That puts those working in the housing sector in an important position – and right now, there's a lot to be across. Three main policy changes came into effect from April 2026, detailed below, and all three have direct implications for the people housing professionals work with every day.

1. Removal of the two-child limit

This is good news for many families, and it's worth taking a moment to appreciate what it means in practice. From the first assessment period beginning on or after 6 April 2026, the restriction that capped child elements at two has gone. Families with three or more children will have their awards adjusted automatically – they don’t need to request it.

For each additional child beyond the second, families outside the benefit cap stand to receive an extra £304 per month, meaning a family with three children who would previously have received just £1 a month could now be entitled to £305.

The cap does complicate things for some. Households whose award is already capped won’t receive any extra benefit, and those sitting just below it will only benefit up to the level of the cap.

So how can housing professionals make a difference? By thinking about who might be sitting on an unclaimed entitlement. Some households stopped claiming when the two-child limit made their award negligible. Others never started. The group most worth having a conversation with are working couples – both in employment, with combined gross earnings below £60,000 – who may not have thought to check whether they qualify. A brief conversation could unlock meaningful support.

2. Changes to the health element

Before April, claimants who were assessed as having limited capability for work and work-related activity received a health element worth £429 per month. This remains in place, but for a smaller group moving forward.

Existing or pre-2026 claimants keep what they have – as do people who are terminally ill, or whose condition is both constant and lifelong. For everyone else, new claimants with a long-term health condition will receive a lower rate of £217. That's a significant reduction, and it matters both for the individuals affected and for anyone helping them understand what they're entitled to.

There is one beneficial change: people with a health element who move into work will no longer have that element automatically reassessed, provided their underlying health condition hasn't changed. That removes a real anxiety for many people who have historically avoided taking up work for fear of losing support they've come to rely on.

3. Discretionary housing payments (DHPs)

In England, the funding landscape for discretionary support is being reorganised. Government grants to councils for DHP expenditure and what was previously the household support fund are being combined into one pot: the new crisis and resilience fund (CRF).

In two-tier council areas, the portion earmarked for housing payments will continue to be made to district councils for the next two financial years, while county councils will receive the remainder to fund local resilience services and direct crisis grants to individuals.

The total grant funding is unchanged from last year – it is reviewed on a three-year cycle – though one meaningful shift is that councils are no longer formally capped on what they can spend on housing payments if local need justifies going further than their allocation. The three-year funding cycle should provide councils with greater certainty to plan for services around local needs, resulting in greater consistency in decision making for housing payments.

The need for specialist knowledge

None of this is simple, and these three changes are just the tip of the iceberg. The housing costs system can feel overwhelming – both for residents trying to understand what they're entitled to, and for the professionals supporting them.

Rules around temporary and supported accommodation, eligibility for migrants and recent arrivals, service charges, changes of circumstances, appeals, and periods of absence from home all require careful navigation.

In many of these areas the right interpretation is often unclear or contested – case law evolves, guidance is updated, and the detail genuinely matters to the people involved.

In a climate where household finances are under real pressure and the policy landscape keeps shifting, being equipped with the right knowledge isn't a nice-to-have – it's part of what good housing practice looks like.

Help with Housing Costs 2026-27 is a joint CIH and Shelter publication and is available here.