Supported housing residents to keep more of what they earn as new rules come into force

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.

Comes as part of the Government’s wider plan to move from a welfare state to a working state, including a £3.5 billion investment in employment support and the biggest youth employment reforms in a generation to create almost one million opportunities for young people.

More than 325,000 residents in supported housing and temporary accommodation will no longer face a drop in income when increasing their working hours, under new rules coming into force today [Monday 5 October 2026].

Under the system inherited by this Government, people living in supported housing and temporary accommodation often received help with their day-to-day living costs through Universal Credit, while support for their rent was paid separately through Housing Benefit.

The two systems had different rules about how much someone could earn before their benefits started to be reduced and for people receiving Housing Benefit, those rules were less generous than for people whose support was provided entirely through Universal Credit.

As a result, some residents who moved into work or increased their hours could see their Housing Benefit reduced more quickly, leaving them worse off despite earning more. In some cases, the fear of losing support with housing costs acted as a disincentive to take on work. This created a cliff edge that trapped people on benefits rather than supporting them into work and financial independence.

The reforms will help make sure that people living in supported housing and temporary accommodation, including nearly 50,000 young people who are starting out in employment, are better rewarded for taking up work or increasing their hours.