More than 300,000 people claiming Housing Benefit will be able to keep more of their earnings under new Department for Work and Pensions (DWP) rules coming into force later this year.
The Government has confirmed the changes will take effect from October 5, 2026, ending what ministers describe as a benefits "cliff edge" that left some people financially worse off if they increased their working hours.
The reforms apply to people living in supported housing and temporary accommodation who receive Housing Benefit in the North East.
The DWP says the new rules are designed to make sure that taking on more work or increasing hours always leaves people better off financially.
Why the rules are changing
Until now, many Housing Benefit claimants living in supported accommodation faced different earnings rules from people claiming Universal Credit.
This meant some residents risked losing housing support if they worked more hours, creating what ministers described as a financial disincentive to work.
According to the DWP, around 315,000 people are expected to benefit from the changes.
The department said the previous system meant vulnerable residents were often forced to choose between remaining on benefits or risking a reduction in their housing support by earning more.
What will change from October?
The regulations introduce five new earned income disregards for working-age Housing Benefit claimants living in supported housing and temporary accommodation.
The DWP says Housing Benefit calculations will be brought closer into line with Universal Credit, removing the sharp drop in support that some people previously faced after increasing their earnings.
The department also confirmed:
- The new rules come into force on 5 October 2026
- Around 315,000 people are expected to benefit
- Earned income disregard amounts will be updated every year
- No claimant will be financially worse off as a result of the changes
Read more
DWP rules - Thousands on Housing Benefit to keep more cash from earnings
Ryanair calls for major change to avoid more flight chaos this summer
Warning as 52 Post Office branches to shut due to Morrisons Daily closures
Part of wider DWP welfare reforms
The Housing Benefit changes form part of a broader package of employment reforms announced by the Government.
Announcing the reforms, Social Security and Disability Minister Sir Stephen Timms said the current rules were preventing people from moving into employment.
He said: "The system we inherited was actively pushing some of the most vulnerable residents away from work rather than towards it."
He added: "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 minister also said the regulations deliver a commitment made in the Autumn Budget and form part of wider welfare reforms.
He said: "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."
Share