The Department for Work and Pensions (DWP) has announced a change to earnings rules affecting more than 325,000 people living in supported housing and temporary accommodation. Starting Monday, 5 October, those claimants will be able to keep a greater proportion of their earnings when they increase their working hours.
Previously, claimants in supported housing received day-to-day living support through Universal Credit, while Housing Benefit separately covered their rent. The differing rules between these benefits meant that people receiving Housing Benefit experienced quicker reductions in their housing support as their earnings rose compared to those receiving Universal Credit only.
This disparity created a ‘cliff edge’ effect, where claimants who worked more or took on additional hours saw their benefit income fall sharply, leaving them financially worse off despite earning more.
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The DWP’s update adjusts the way Housing Benefit is calculated, aligning it more closely with Universal Credit rules. This change aims to remove the incentive to avoid additional work due to benefit reductions and to provide greater financial security for claimants.
Prime Minister Andy Burnham emphasised the importance of the reform, stating, “People should never have to choose between keeping a roof over their head or being able to work. This change ensures people keep more of what they earn and helps families gain stability.”
Minister for Social Security and Disability Sir Stephen Timms added, “For too long the system discouraged vulnerable residents from working. We are fixing that now to ensure working more hours results in financial improvement rather than loss.”
Homelessness Minister Florence Eshalomi highlighted the link between employment and recovery from homelessness, noting the government’s £4 billion investment to end homelessness. She said, “Supporting people in temporary accommodation to secure work and increase earnings is a key part of building lasting independence. We will continue to provide safe placements and improve access to essential support services.”