Emergency support for people in a short term financial crisis will come as food vouchers instead of money.
Local authorities will be running the scheme from next month, and each has it’s own eligibility rules, however critics say it will miss out other essential items and encourage theft.
Tens of thousands of vulnerable people who would normally receive a cash loan when in financial crisis, will now be issued with food vouchers instead.
It is available as an emergency government run social fund for people who are already on a tight budget, but have money stolen, or their benefits are delayed, and the loan is repaid in deductions from future benefits.
It also includes grants that are available for disabled people, ex-prisoners and victims of domestic violence, to enable them to buy or replace items that would help them live independently, such as beds or clothing.
It was decided last year that the current system of giving cash loans would be changed to a system of controlled funding so that it is spent in the intended place.
These can come in the form of payment cards, and will be restricted to essential goods such as food and nappies, and will be blocked or monitored to prevent use on alcohol, cigarettes or gambling.
Each local authority will have different eligibility criteria and different conditions, for example one local authority will only issue the support with the condition of good behaviour, as many are having to restric eligibility.
However, critics have said that the payment card system has already failed when used with asylum seekers as it means they are unable to buy other essential items that are not food, and this is likely to encourage them to find other methods of obtaining the money.
The government has reduced the amount it allows for the social fund, from £230m in 2009-10 with only £178m allocated for 2013-14. Councils say these reductions have left them with no other option than to offer vouchers, refer applicants to food banks and secondhand furniture projects, and to restrict eligibility.
Alison Garnham, chief executive of the Child Poverty Action Group, said:
Local authorities have been given a difficult task, to deliver support on a reduced budget at a time of rising need.
But we are seriously concerned that some authorities will not be providing any access to cash to families to meet their essential needs, and may be offering support in a way that serves to stigmatise those who need it.
Critics have also said that, as some authorities drafting in food parcel arrangements, voluntarily donated food is given to existing Government welfare arrangements, blurring the line between public giving and taxpayer-funded Government support.