New Housing Benefit Rules to Benefit 315,000 Claimants
The Department for Work and Pensions (DWP) has announced new Housing Benefit rules that will affect 315,000 residents in supported housing and temporary accommodation. From October 2026, these claimants will no longer face a reduction in income when they increase their working hours, removing a key barrier to employment.
The rule change, announced on Monday by the DWP and the Labour Party government, alters how Housing Benefit is calculated to align it with Universal Credit. Previously, less generous rules created a "cliff edge" that trapped people on benefits rather than supporting them into work, according to the Labour Party.
Minister Says Changes Fix Flawed System
Sir Stephen Timms, DWP minister, 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."
The announcement delivers on a commitment made in the Autumn Budget and forms part of the government’s wider plan to reform the welfare system. Sir Stephen 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."
New Regulations Come into Force in October
The Housing Benefit (Earned Income Disregards) Regulations 2026 were laid before parliament on 6th July 2026 and come into force on 5 October 2026. Five new earned income disregards are being introduced for working-age Housing Benefit claimants in supported housing and temporary accommodation.
Disregard values will be updated annually, the DWP has confirmed. No group will be made worse off by this change; any variation in immediate financial gain reflects how existing Universal Credit and Housing Benefit tapers already operate, the DWP added.
