DWP housing benefit major shake-up confirmed for 2026

A benefit change designed to help people keep more of their earnings has been confirmed, with rollout set for 2026 <i>(Image: Lucy North/PA Wire)</i>
A benefit change designed to help people keep more of their earnings has been confirmed, with rollout set for 2026 (Image: Lucy North/PA Wire)
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A long-awaited change to benefits designed to make work pay has been confirmed by the DWP - but claimants will have to wait until late 2026 to see it introduced.

The update came after Darlington MP Lola McEvoy pressed the Government for clarity on when new “earned income disregards” would take effect, with a question in the House of Commons.

Responding on behalf of the Department for Work and Pensions, minister Stephen Timms said the changes are scheduled for rollout from Autumn 2026.

"These disregards will help smooth the transition between the Universal Credit and Housing Benefit for individuals in Supported Housing and Temporary Accommodation as they move into work or increase their earnings, ensuring work always pays," he said.

"The new disregards will be in place from Autumn 2026. This will require legislative changes and be accompanied by IT changes made to local authority IT systems.

"In preparation for this, we have already begun engagement with stakeholders to ensure that the implementation meets the needs of those affected.

"This is accompanied by clear communications to support local authorities, housing providers and third sector organisations to ensure that eligible customers are aware of and able to utilise this change."

What are the changes to Housing Benefit in 2026?

The reform, first announced in the Autumn Budget last year, will apply to people receiving Housing Benefit while living in supported housing or temporary accommodation.

In practice, the new rules will allow claimants to keep more of what they earn, reducing the risk of being financially worse off when taking on extra hours or a new job.


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However, the delay until Autumn 2026 reflects the scale of the changes required, with new legislation as well as updates to local authority IT systems.

Officials say they have already begun working with councils, housing providers and charities to prepare for the shift, alongside plans to communicate the changes clearly to those affected.

While the policy has been broadly welcomed as a step toward smoother benefit transitions, questions remain over whether the timeline is too slow for those currently struggling with the cost of living.

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