UK Government announces Housing Benefit changes for supported and temporary accommodation

Key information:

• The Housing Benefit (Earned Income Disregards) Regulations 2026 were laid before parliament on 6th July 2026.
• They will come into force on 5 October 2026.
• Five new earned income disregards are being introduced for working-age Housing Benefit claimants in supported housing and temporary accommodation.
• Disregard values will be updated annually.
• No group is made worse off by this change; any variation in the immediate financial gain reflects how existing Universal Credit and Housing Benefit tapers already operate.

The issue:

The rent in temporary and supported accommodation is usually higher than market rents, due to the intensive housing management, communal areas, and security associated with this type of provision. However, this can have a particularly negative impact on people who either have a job when they become homeless, or are trying to enter employment while in temporary or supported accommodation.

When someone takes on more than a small amount of work, they face a cut in their Housing Benefit entitlement, meaning they need to cover their rent costs. As these are higher than other types of housing, this is often unaffordable – leaving people worse off than before they entered employment. This can discourage people from entering work, despite this being a really important goal for some people. Alternatively, they may feel that they have to leave supported accommodation earlier than they would like, meaning they need to make two major life transitions without the support of staff who are based within the supported accommodation service.

Another group particularly impacted by this issue is people who are fleeing domestic abuse and trying to enter refuge. If they are in work, the rent in refuge (which is a form of supported accommodation) can be unaffordable, particularly if they are also liable for rent or mortgage payments for the property they are fleeing. This can discourage people from leaving the perpetrator, leaving them in a risky, and sometimes life-threatening situation. Alternatively, they will leave and either have nowhere to go, or find themselves in debt as a result of entering refuge.

Similarly, if someone in work becomes homeless and tries to enter temporary accommodation, this can be unaffordable, putting them under additional financial strain during a very stressful time in their lives.

Our stance:

Cymorth has long advocated for changes to Housing Benefit rules to enable people in supported accommodation to enter, and remain in, work – without being penalised financially. Over the last ten years, we have raised this issue with the Welsh Government, the UK Government, and the Welsh Affairs Committee, highlighting how the rules directly contradict the policy intention of the Department for Work and Pensions, which is to support more people to find employment.

We warmly welcome the regulations tabled by the UK Government, and hope this leads to more people being able to access a safe place in temporary or supported accommodation when they face homelessness or are fleeing from abuse.

We also hope these changes lead to people in supported accommodation being able to realise their goals and aspirations, should they feel ready and able to enter employment. For too long, people have been forced to choose between employment opportunities, being able to continue to live in supported accommodation, or being penalised financially.

Housing Benefit (Earned Income Disregards) Regulations 2026:

On 6th July 2026, the UK Government tabled the Housing Benefit (Earned Income Disregards) Regulations 2026. These regulations amend Schedule 4 of the Housing Benefit Regulations 2006, introducing five new earnings disregards. A housing benefit earnings disregard is the set amount of weekly income from work that is ignored when the local council calculates a person’s Housing Benefit entitlement.

The Housing Benefit (Earned Income Disregards) Regulations 2026 will come into force on the 5 October this year. The following income disregards will be applied, depending on someone’s age and relationship status: