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From 5 October 2026, the way earnings are treated in some Housing Benefit calculations will change. The new rules are intended to make it easier for eligible working-age residents in supported housing and temporary accommodation to start work or increase their earnings without facing a sudden drop in their overall income.
The change is positive, but it is important to understand its limits. It does not mean that earnings will never affect Housing Benefit, and the outcome will depend on each person’s circumstances.
What is changing?
Eligible working-age Housing Benefit claimants living in specified accommodation or temporary accommodation will receive an additional earned-income disregard.
An earnings disregard is the amount of employment or self-employment income that the council does not count when calculating Housing Benefit. It is not a separate payment. The new amount will sit alongside any standard earnings disregard that already applies.
The Department for Work and Pensions says the change is designed to reduce a particular financial ‘cliff edge’ caused by the interaction between Universal Credit and Housing Benefit. This could otherwise leave some people worse off when their earnings increase.
The change will apply automatically to eligible new and existing Housing Benefit claims from 5 October 2026. There is no minimum-hours requirement, and employed and self-employed earnings can both be considered.
Who may be affected?
The rules apply to eligible working-age Housing Benefit claimants whose home meets the legal definition of specified accommodation or temporary accommodation.
Not every supported-housing arrangement is treated in exactly the same way. A local authority remains responsible for deciding whether a claim and accommodation meet the relevant conditions.
The government estimates that around 300,000 households claiming Housing Benefit live in specified or temporary accommodation, although the effect of the change will vary from person to person.
What are the new weekly amounts?
| Household circumstances | Weekly amount |
|---|---|
| Single claimant or lone parent aged under 25 | £61.41 |
| Single claimant or lone parent aged 25 or over | £77.73 |
| Couple where both members are under 18 | £97.33 |
| Couple where at least one person is 18 or over and both are under 25 | £61.53 |
| Couple where at least one person is aged 25 or over | £119.70 |
These figures are not a promise that somebody’s Housing Benefit will stay the same. The DWP says the new disregard is intended to smooth the transition as earnings rise, rather than remove every possible reduction in benefit. The figures are expected to be reviewed annually.
What should residents do?
Residents must continue to report changes in earnings, employment, household circumstances or accommodation to the appropriate organisations in the usual way.
If you are starting work, becoming self-employed or changing your hours, ask your council’s Housing Benefit team how the rules apply to your individual claim. A qualified welfare-rights or benefits adviser can also help you understand a calculation before you make financial commitments.
Keep copies of relevant payslips, award notices and messages about reported changes. If a decision does not look right, ask the council to explain the calculation and how the earnings disregard has been applied.
Work, choice and independence at SLS
At SLS, ‘Work’ is one part of Live. Learn. Work. Play. For one person it may mean paid employment; for another it may mean volunteering, training, building confidence or preparing for a future opportunity.
Nobody should feel pressured to work as a condition of their home or support. Where employment is part of a resident’s goals, our role is to encourage informed choices and help the person connect with the appropriate employment and benefits services.
Where to find official information
Read the DWP’s detailed Housing Benefit guidance and the government announcement about the new rules.
This article provides general information, not individual benefits or financial advice. Rules and circumstances can differ, so always confirm how a change applies to your own claim with your council or a qualified adviser.