New DWP Universal Credit and Housing Benefit rules now in force for 325,000 claimants

The Department for Work and Pensions (DWP) has changed how Housing Benefit is calculated for working-age claimants in supported housing and temporary accommodation, so that it aligns with Universal Credit. The Housing Benefit (Earned Income Disregards) Regulations 2026 were laid before parliament on 6 July 2026 and came into force on 5 October 2026¹. Birmingham Live reported the change as "now in force" on 6 November 2026, describing it as "rolled out a month ago" and "in force following an October tweak to legislation"².

The DWP says more than 325,000 residents in supported housing and temporary accommodation will keep more of what they earn when they take up work or increase their hours, including nearly 50,000 young people starting out in employment¹. Five new earned income disregards are being introduced for working-age Housing Benefit claimants in supported housing and temporary accommodation, and the disregard values will be updated annually¹.

Under the previous system, residents often received help with day-to-day living costs through Universal Credit while their rent was paid separately through Housing Benefit. The two systems had different rules on how much someone could earn before benefits were reduced, and the Housing Benefit rules were less generous, so some residents who moved into work or increased their hours saw their Housing Benefit reduced more quickly¹. The DWP says no group is made worse off by the change, and that any variation in the immediate financial gain reflects how existing Universal Credit and Housing Benefit tapers already operate¹.

"New rules coming into force today will end the “cliff edge” loss of income faced by residents in supported housing and temporary accommodation when they increase their working hours."

DWP press release¹

The DWP published the announcement on 5 October 2026, the same day the regulations took effect¹. Birmingham Live's report of 6 November 2026 attributes the change to "Labour Party leader Andy Burnham" and quotes him as Prime Minister; the DWP release also carries a quotation from "Prime Minister Andy Burnham"¹. The DWP release names Sir Stephen Timms as Minister for Social Security and Disability and Florence Eshalomi as Homelessness Minister¹.

Why it matters for households

The change affects working-age Housing Benefit claimants living in supported housing and temporary accommodation who work or take on more hours. From 5 October 2026, the amount they can earn before their Housing Benefit is reduced is set under the new disregards, which the DWP says brings the calculation into line with Universal Credit¹. The DWP states that no group is worse off and that the size of any immediate gain varies according to the existing Universal Credit and Housing Benefit tapers¹. The department has not published the cash value of each disregard in the release, and the taper rates themselves are not set out there¹.

The DWP frames the change as part of a wider plan to "move from a welfare state to a working state", citing a £3.5 billion investment in employment support for sick or disabled people, including personalised support to help 300,000 people into work via the Connect to Work programme, and youth employment reforms intended to create almost one million opportunities for young people¹. Homelessness Minister Florence Eshalomi said the government is "investing over £4 billion to end homelessness for good"¹.