Beneficiaries Exceeding Income Threshold To Get 2 Year Transition Period For Rental Subsidy

Beneficiaries of the Housing Benefit Scheme (HBS) whose income rises above the eligibility threshold will not lose their rental subsidy immediately, provided they continue living as tenants in the private rental sector.

Instead, they will benefit from a two-year transition period under a new gradual reduction mechanism.

The measure was announced by Minister for Housing and Lands Owen Bonnici, who said it represents another Electoral Manifesto pledge being implemented within the Government’s first 100 days.

Minister Bonnici said the changes to the HBS, also known as the rental subsidy scheme, reflect the Government’s aim of making housing support fairer, more targeted and more responsive to changes in families’ financial circumstances.

Under the new system, beneficiaries who exceed the income threshold will see their benefit reduced gradually over a two-year period rather than losing the assistance immediately.

During the first year, they will continue receiving 50% of the subsidy they previously received, while in the second year this will decrease to 25%.

The Minister said the measure will provide greater stability for families during this transition period and ensure that those who improve their financial circumstances are not faced with an immediate loss of support.

The HBS remains one of the Housing Authority’s main schemes aimed at reducing housing costs for low-income families. In 2025, investment in the scheme reached €10.7 million, with just under 4,000 families benefiting from the subsidy throughout the year.

The new mechanism will be introduced automatically for eligible beneficiaries, meaning there will be no requirement to submit a new application. It also forms part of the Housing Authority’s wider digitalisation efforts, aimed at reducing waiting times between applications and payments while simplifying procedures.

Housing Authority Chief Executive Matthew Zerafa said the measure will allow families and individuals who are improving their situation to continue moving forward without experiencing a sudden loss of assistance. He said the gradual reduction will provide a more sustainable and stable transition.

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Photo Source: DOI - Daniel Scicluna