The Department for Work and Pensions has made the Income-related Benefits (Subsidy to Authorities) Amendment Order 2026, a statutory instrument signed at 9.30 am on 13 October 2026, laid before Parliament at 4.30 pm the same day, and due to come into force on 5 November 2026. It amends the 1998 Order that governs how housing benefit subsidy is calculated and paid to local authorities in England, Wales and Scotland. The measure is technical, but it is not minor for local authority finance and benefits teams. The instrument updates the figures, circular references and calculation rules used when councils submit subsidy claims, including amendments that apply to the financial years beginning on 1 April 2025 and 1 April 2026.
The Order is not limited to claims arising after 5 November 2026. Its application provisions state that articles 3, 5 and 6, together with the Schedule, are to be used when determining subsidy for the relevant year beginning on 1 April 2025. Article 4 applies for any relevant year beginning on or after 1 April 2025, while article 7 applies to the relevant year beginning on 1 April 2026. That matters because the instrument reaches back into subsidy years already under calculation. For authorities finalising 2025-26 claims, the amended references and substituted figures form part of the legal basis on which subsidy must be assessed. For Welsh authorities, a separate 2026-27 adjustment applies to rent rebate limitation deductions.
One amendment updates the definition of the Housing Benefit Assurance Process, or HBAP. The 1998 Order previously pointed to a version dated 28 April 2025. Article 3 substitutes a version published on 2 April 2026. The Explanatory Note states that this change is intended to align the Order with the appropriate HBAP publication for the financial year ending March 2026. In administrative terms, it refreshes the assurance reference point used within the subsidy framework, rather than creating a new scheme or a new payment stream.
The clearest structural change is the removal of the separate subsidy mechanism for the Verify Earnings and Pension Alerts service, usually shortened to VEP. Article 4 omits article 12(1)(bza) of the 1998 Order and removes Schedule 1ZB, which had set the additional subsidy amounts payable to authorities for handling those alerts. According to the Explanatory Note, VEP funding became part of mainstream housing benefit administration funding from 1 April 2025. The result is that councils will no longer calculate a distinct additional subsidy amount for VEP work under this Order. The funding route changes, but the note does not present the amendment as a removal of support altogether.
Article 5 and the Schedule replace Schedule 1 to the 1998 Order, which contains the sums used in the calculation of subsidy for the year beginning 1 April 2025. That substitution is central to the annual subsidy exercise because Schedule 1 supplies the figures used in claim calculations. The Order also amends Schedule 1ZC, which covers additional subsidy linked to the Housing Benefit Award Accuracy Initiative. It updates the definition of HBAAI so that it refers to Housing Benefit Circular HB A7/2025, first published by DWP on 24 April 2025, and updates the funding reference in paragraph 2 to Housing Benefit Subsidy Circular HB S4/2025, also first published on 24 April 2025. The Explanatory Note says those amendments reflect the additional amounts notified to participating authorities for the year beginning 1 April 2025.
A separate set of changes applies only to Welsh authorities with Housing Revenue Account dwellings. Article 7 amends Schedule 4A on rent rebate limitation deductions, reducing the rebate proportion figure from 0.369 for the year beginning 1 April 2025 to 0.332 for the year beginning 1 April 2026. The same article also replaces the specified amounts and guideline rent increases used in the Schedule 4A deduction formula. For Welsh councils, the practical effect is direct: subsidy calculations for 2026-27 must use the new proportion and the revised amounts inserted by the instrument, rather than the figures used for the previous year.
The instrument also records the process behind the change. It states that the Secretary of State acted under powers in the Social Security Administration Act 1992, obtained Treasury consent and consulted organisations appearing to represent the authorities concerned. The Order was signed for DWP by Stephen Timms, Minister of State, with Treasury consent signed by Claire Hughes and Christian Wakeford on 12 October 2026. The Explanatory Note further states that no full impact assessment has been produced because no, or no significant, effect on the private, voluntary or public sector is foreseen. That places the Order firmly in the category of maintenance legislation, but it still carries operational weight. For councils preparing subsidy returns, the amendments determine which figures, circulars and funding channels may lawfully be used from 5 November 2026 onward.