More than 300,000 people living in supported housing and temporary accommodation will no longer face a reduction in income when they increase their working hours, following new regulations laid before Parliament that take effect on 5 October 2026.
Under the current system, many Housing Benefit claimants in supported accommodation faced a financial disadvantage when moving into work or increasing their earnings. While Universal Credit includes more generous work allowances, Housing Benefit rules have not kept pace, creating a cliff edge that could leave people financially worse off for working more. In some cases, this discouraged employment and created barriers to progressing in work.
The new regulations aim to remove this disincentive by introducing additional earned income disregards for working-age Housing Benefit claimants in supported housing and temporary accommodation. This will help ensure that people can increase their earnings without facing an immediate loss of housing support.
Key Changes
- The Housing Benefit (Earned Income Disregards) Regulations 2026 were laid before Parliament on 6 July 2026 and come into force on 5 October 2026.
- Five new earned income disregards will be introduced for working-age Housing Benefit claimants in supported housing and temporary accommodation.
- Disregard amounts will be updated annually.
- No claimant will be financially worse off as a result of these changes. Any differences in the immediate gain from additional earnings reflect the existing interaction between Universal Credit and Housing Benefit taper rules.
Further Information
Practical Implications
- Removes a key financial barrier to taking up work or increasing hours.
- Improves work incentives for people living in supported housing and temporary accommodation.
- Reduces the risk of claimants losing housing support as their earnings increase.
- Aligns Housing Benefit rules more closely with Universal Credit work incentives.