Communities Minister Deirdre Hargey has announced plans to extend mitigation measures for the so-called bedroom tax in Northern Ireland.
Stormont officials said the extension had no end date, and would cost £23million a year.
Around 38,000 homes in Northern Ireland faced potentially losing a quarter of their benefits if they were deemed to have a spare room at the end of March.
Minister Hargey said: “We have a responsibility to protect the poorest and most vulnerable in society. I am pleased to announce that today the Executive agreed to my recommendation, in line with New Decade, New Approach, for the urgent extension of the bedroom tax mitigation beyond March 2020.
“In the coming weeks I will introduce new legislation to extend this essential mitigation, which will continue to safeguard more than 38,000 of the most vulnerable households in our society from harsh Tory welfare cuts.”
The Social Size Sector Criteria - commonly known as the bedroom tax - was first introduced in the UK in 2013.
Northern Ireland was thought to be particularly exposed to it as there is not the social housing available to allow people to downsize to a smaller property and therefore avoid getting penalised.
The welfare mitigation scheme was one of a range of measures agreed by the Executive as part of the Fresh Start Agreement in 2015. The intervening years were to be used to find a local solution to the issue , however, the collapse of power-sharing prevented this.
The New Decade, New Approach agreement includes a measures to allow housing associations to build more homes. It also pledged to extend the bedroom tax mitigation measures.
The Cliff Edge Coalition - which represents a group of over 100 organisations campaigning on the potential impact of the end of the mitigation measures - welcomed the minister's move.
It claimed households faced losing around £50 a month had the minister not acted.
"We look forward to working with the Minister to develop and introduce strengthened measures to take account of new challenges such as Universal Credit, including the Two- Child Limit, as well as cuts to housing benefits in the private rented sector," said Kate McCauley from Housing Rights.
The minister added: “A society is judged on how we protect the most disadvantaged. I am a minister who will fight to protect those families living in poverty; low-income families, single-parent families, those with disabilities and children and young people. I am working hard to target resources towards those most in need.
“There are also other mitigations which need to be looked at as we review the mitigation measures we committed to in New Decade, New Approach. I will continue to work with stakeholders in moving forward with that important piece of work.”
Green Party leader Clare Bailey welcomed the move.
"It will come as a relief for many people who have had the bedroom tax threat hanging over them for some time," she said.
"The bedroom tax is a cruel Tory policy that has caused serious hardship to people in England and Wales and was set to hit Northern Ireland households even harder.
"I want to see the bedroom tax scrapped altogether but at this time it's important to recognise the efforts of the sector in lobbying for the extension of these mitigations.
"There are a number of other welfare mitigations due to come to an end at the end of March - I look forward to further action from the minister to address this."