The government has introduced a new mechanism that will allow beneficiaries of Malta's Housing Benefit Scheme (HBS) who exceed the income eligibility threshold to continue receiving partial rent assistance for two years, rather than losing the benefit immediately, the Ministry for Housing and Lands said in a statement. 

Announcing the measure, Minister for Housing and Lands Owen Bonnici said the reform fulfils another electoral manifesto pledge being implemented within the government's first 100 days in office.

Under the new system, beneficiaries whose income rises above the eligibility limit but who continue renting in the private sector will receive a gradual reduction in their rent subsidy. They will retain 50% of their previous benefit during the first year of the transition period and 25% during the second year before the assistance comes to an end.

Bonnici said the changes to the Housing Benefit Scheme are intended to make government assistance "fairer, more targeted and more responsive" to changes in families' financial circumstances. He added that the government would continue reviewing and updating the Housing Authority's schemes to ensure they reflect current economic and social realities.

The minister said the phased reduction would provide greater financial stability for families while avoiding situations where people who improve their financial position are immediately penalised by the loss of housing assistance.

The Housing Benefit Scheme is one of the Housing Authority's main measures to help low-income households meet private rental costs. In 2025, the government invested €10.7 million in the scheme, with just under 4,000 families benefiting from the subsidy during the year.

The Housing Authority said the new mechanism will be applied automatically to eligible beneficiaries, with no need to submit a new application. The measure also forms part of the authority's wider digitalisation programme, which aims to reduce processing times between applications and first payments while cutting bureaucracy for applicants.

Housing Authority Chief Executive Matthew Zerafa said the reform would ensure that families and individuals who improve their financial situation are not faced with the sudden loss of rent assistance. Instead, the subsidy will be reduced in two stages over a two-year period, allowing beneficiaries to progress towards greater financial independence in a more stable and sustainable manner.