Supported housing residents to keep more earnings under Housing Benefit changes

More than 300,000 people living in supported housing and temporary accommodation will be able to keep more of what they earn under new Housing Benefit rules designed to remove barriers to work.

The Government said the changes, which were laid before Parliament today and will take effect in October 2026, will align Housing Benefit work allowance rules with those used in Universal Credit.

Previously, people in supported housing receiving Housing Benefit could lose support more quickly than Universal Credit claimants when increasing their working hours, creating what the Government described as a “cliff edge” that discouraged some from taking on more work.

The Department for Work and Pensions (DWP) said the reforms will benefit around 315,000 claimants by ensuring they can retain more of their income as their earnings increase.

Sir Stephen Timms, minister for social security and disability, said: “The system we inherited was actively pushing some of the most vulnerable residents away from work rather than towards it.

“These changes fix that – ensuring residents can keep more of what they earn, so that taking a job or increasing hours always pays better than benefits.

“This announcement delivers on a commitment made in our Autumn Budget, and forms part of the government’s wider plan to reform the welfare system – tearing out the barriers that have trapped people in dependency.”

He added: “We are replacing that system with one that rewards work and ensures people keep more of what they earn, while protecting those who need it most.”