DWP Rule Change Lets 325,000 Supported Housing Residents Keep More Earnings
New rules from 5 October align Housing Benefit with Universal Credit for people in supported housing and temporary accommodation, ending a "cliff edge" in income.
Residents of supported housing and temporary accommodation can now keep more of what they earn, after the government changed how Housing Benefit is worked out. People are searching for the details because the change is meant to end a "cliff edge" in income when someone takes a job or works more hours.
What has changed
Previously, many people in supported housing and temporary accommodation got help with everyday living costs through Universal Credit. Help with rent was paid separately through Housing Benefit.
The two systems had different rules on how much someone could earn before payments were reduced, and the Housing Benefit rules were less generous. The government says some residents who moved into work or increased their hours saw Housing Benefit cut so quickly that they ended up worse off.
The new regulations bring Housing Benefit in line with Universal Credit. The Independent reports that under that mechanism, entitlement falls by 55p for every £1 a claimant earns, until it reaches zero.
Who qualifies and how much
The government says new earned income disregards apply to working-age people in supported housing and temporary accommodation. A disregard is the part of your earnings ignored when Housing Benefit is calculated, so support tapers off more gradually.
Two examples have been published:
- A single claimant aged 25 or over has £77.73 of weekly earnings disregarded.
- A couple with at least one person aged 25 or over has £119.70 disregarded.
The sources do not give figures for other groups, such as under-25s. The amounts will rise each year in line with changes to Universal Credit. Ministers estimate that nearly 50,000 of those affected are young people starting out in work.
Political and housing context
Prime Minister Andy Burnham called it a "common-sense change" and said people should never have to choose between a roof over their head and working. Homelessness minister Florence Eshalomi said the government is investing over £4 billion to end homelessness and that employment is an important step in many people's recovery.
The change comes as temporary accommodation use remains high. Official data show a record 135,580 households in temporary accommodation in England at the end of March, including more than 177,530 children. Councils in England spent a record £2.9bn on it in the year to April, according to The Independent.
Campaigners want more, urging ministers to unfreeze Housing Benefit in next month's Budget. Citizens Advice research found fewer than two per cent of advertised private tenancies are affordable for people relying on housing benefits.
What it means for you
If you live in supported housing or temporary accommodation and work, or are considering more hours, more of your pay should now be ignored when your Housing Benefit is calculated. Your own entitlement depends on your circumstances, so check with your local council or the DWP about your figures. Watch for next month's Budget, where campaigners are pushing for a Housing Benefit unfreeze.
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Quick answers
When did the new Housing Benefit rules start?
The government said they came into force on Monday 5 October 2026.
Do the changes affect everyone on Housing Benefit?
No. The sources say they apply to working-age people in supported housing and temporary accommodation, covering more than 325,000 residents.
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