Eligible working-age residents who work while living in specified supported housing or temporary accommodation are now covered by revised Housing Benefit earnings rules designed to stop an increase in work from leaving them with less money overall.
The change took effect on Monday 5 October and alters how earnings are treated when Housing Benefit is worked out for people whose rent is supported through that benefit. It is aimed at a long-standing mismatch between Housing Benefit and Universal Credit for residents whose day-to-day living costs and rent support can be dealt with through separate systems.
Previously, someone in the affected forms of accommodation could find that Housing Benefit began to reduce at a less generous earnings level than Universal Credit. That meant taking a job, accepting extra shifts or increasing hours could lead to a sharp reduction in help with rent. The revised rules bring the earnings treatment closer to that used for Universal Credit, so that more income is left out of the Housing Benefit calculation before support is tapered.
The measure is not a new flat-rate payment. Instead, it introduces five weekly earned-income disregards: amounts of pay that are ignored when earnings are calculated for Housing Benefit. A single claimant under 25 has a disregard of £61.41 a week, while the amount for a single claimant aged 25 or over is £77.73. For couples, the disregard is £97.33 where both members are under 18, £61.53 where both are under 25, and £119.70 where at least one member is 25 or over.
The disregards apply to people undertaking remunerative work as employees or through self-employment who live in specified accommodation or temporary accommodation. They do not create an automatic entitlement to Housing Benefit, set a claimant’s rent, or remove all of the normal interaction between earnings and benefits. Earnings above the relevant disregard can still affect an award, and an individual outcome will depend on the rest of a household’s circumstances and existing entitlement.
The legal change amends the Housing Benefit Regulations 2006. It applies to working-age Housing Benefit rather than the separate rules for people who have reached qualifying age for State Pension Credit. Its territorial extent covers England, Wales and Scotland. The definitions of specified accommodation and temporary accommodation are linked to the corresponding Universal Credit rules, making the scope more specific than a general change for every Housing Benefit claimant.
More than 325,000 residents in supported housing and temporary accommodation are expected to benefit, including nearly 50,000 young people starting out in employment. For people rebuilding stability after homelessness, leaving care, ill health or other disruption, the practical issue is whether extra work leaves a household in a stronger financial position rather than putting accommodation at risk.
The regulations were signed in July and were set to commence in October, but 5 October is the point at which the new calculation rules began to apply. Disregard values are due to be updated annually. The change therefore marks an implementation milestone for a policy intended to make work and progression more financially workable for residents whose housing costs are met through Housing Benefit.
