16th October 2026 • My Family Our Needs

More than 325,000 supported housing residents will be able to keep more of what they earn as new rules come into force.

On October 5^th, a new rule came into force that means that residents in supported housing will no longer face a drop in income when increasing their work hours or taking up new work.

Under the system inherited by the current government, people living in support 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.

These two systems had different rules about how much a person could earn before their benefits started to be reduced; 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 than if they hadn’t started working or increased their hours. In some cases, this was a disincentive to take on work.

The Government argues that the reforms will help make sure 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.

The new regulation has changed how Housing Benefit is calculated so that it aligns with Universal Credit. The aim is to incentivise residents in supported housing or temporary accommodation into work.

Andy Bunham, Prime Minister, said, ‘People should never have to choose between keeping a roof over their head or being able to work. But the system has been rigged against some of the very people trying their hardest to get on, particularly young people starting out, who are being left worse off for earning more.

‘We’re putting that right through a common-sense change that will help people keep more of what they earn. This is what progressive welfare reform looks like: helping people into work and giving families the security and breathing space they need to get on. That’s how we make Britain better off.’

Sir Stephen Timms, Minister for Social Security and Disability, said, ‘For too long, the system has been doing the opposite of what it should: discouraged some of the most vulnerable residents from working rather than helping them into jobs.

‘We’re putting that right, so that residents keep more of their earnings, and so that working more hours leaves people better off than staying on benefits.’

Seyi Obakin, Chief Executive Officer at Centrepoint, said, ‘This is a landmark win for young people, and we commend the government for getting this change over the line. For too long young people in supported housing, particularly those at the start of their careers, have had their ambitions blocked by a system that punished them for working harder. […]

‘From 5^th October a young person living in support housing will keep far more of what they earn, so their extra hours will finally add up. The changes will mean most young people will not experience the stark financial cliff edge they once faced.’

For more information on Housing Benefit and Universal Credit, view our Benefits and Finances page or visit www.gov.uk/housing-benefit and www.gov.uk/universal-credit

In other news, families in England have been promised earlier access to support, alongside stronger oversight of autism and ADHD assessments, following an independent review.