New regulations aim to ensure supported housing residents keep more of their earnings from October
More than 300,000 people living in supported housing and temporary accommodation across England will be able to keep more of what they earn after the UK Government introduced new Housing Benefit regulations designed to remove financial barriers to work.
The Department for Work and Pensions (DWP) laid the Housing Benefit (Earned Income Disregards) Regulations 2026 before Parliament on 6 July 2026. The new rules are scheduled to come into force on 5 October 2026.
Under the current system, many residents receiving Housing Benefit have faced reductions in Housing Benefit when increasing their working hours or moving into employment. This has been caused by differences between the earnings rules for Housing Benefit and Universal Credit, creating what the Government describes as a “cliff edge” that reduced the financial reward for working more hours.
The new regulations will align the Housing Benefit earned income disregards with those used in Universal Credit. As a result, eligible claimants living in supported housing and temporary accommodation will be able to retain a greater proportion of their earnings before their Housing Benefit begins to reduce.
The Government estimates that around 315,000 working-age Housing Benefit claimants will benefit from the changes once they take effect in October. Five new earned income disregard levels will be introduced for eligible claimants, and these values will be updated annually. According to the Government, no claimant will be financially worse off as a result of the reforms, although the immediate financial gains may differ depending on individual benefit circumstances.
Sir Stephen Timms, Minister for Social Security and Disability, said the existing system discouraged some of the most vulnerable residents from entering employment or increasing their working hours. He said the reforms are intended to ensure that taking a job or working additional hours leaves people financially better off while continuing to protect those who require support.
The DWP said the measure forms part of the Government’s wider programme of welfare reform aimed at encouraging employment. It follows other recent initiatives, including changes to Universal Credit, the introduction of Right to Try legislation for disabled people and those with health conditions, the Connect to Work programme, and the deployment of 1,000 Pathways to Work advisers to help more people move into employment.
The Government stated that the regulations fulfil a commitment made in the Autumn Budget and are intended to remove financial disincentives that discouraged residents from increasing their earnings through work.