Supported housing and temporary accommodation residents to keep more of what they earn under new rule change

The government has announced it is bringing housing benefit rules into line with universal credit in a move aimed at ensuring fewer temproary accommodation and supported housing residents lose income when they increase their working hours.

Under the previous system, the work allowance was higher for universal credit, which is paid to most benefit claimants, than for housing benefit, which is still claimed by people in supported housing and temporary accommodation. 

However, the new regulations will introduce five new earned income disregards for working-age housing benefit claimants, which mean both types of financial support will be calculated in a similar way.

The government said the “less generous” rules “created a cliff edge that trapped people on benefits rather than supporting them into work.”

The new rules will be laid in parliament today.

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.”

The change, which comes into effect on 5 October 2026, will affect around 315,000 people in supported housing and TA.

The government said it is part of its “commitment to move from a welfare state to a working state.”

It reported that “some landlords even discouraged residents from taking jobs to protect their own rental income.”