The Department for Work and Pensions (DWP) has announced that, starting 5 October 2026, five new types of earned income will be disregarded when calculating Housing Benefit entitlements. This adjustment affects working-age claimants residing in supported housing and temporary accommodation.
These disregards mean certain amounts of money or capital will not be counted towards a claimant’s income or savings, potentially increasing their benefit entitlement. The changes were formalised through the Housing Benefit (Earned Income Disregards) Regulations 2026, which were laid before Parliament on 6 July 2026.
According to the DWP, these new disregards will be updated annually and are designed so that no claimant group will receive less support than before. Variations in the financial impact reflect the way existing Universal Credit and Housing Benefit taper rates operate.
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Emma Haddad, Chief Executive Officer of St Mungo’s, welcomed the announcement, highlighting the positive implications for people living in supported accommodation. She emphasised that the previous system often penalised claimants for working more, sometimes forcing them to choose between employment and keeping their housing.
“For many, work is a path to financial resilience and independence, essential for maintaining stable housing,” Haddad said. “The new disregards remove barriers and encourage more people to engage in employment, which benefits their health, wellbeing, and community connections.”
St Mungo’s supports hundreds of individuals through training and employment services to help them build skills and confidence for the workforce. The organisation views this policy update as a significant step towards aiding recovery from homelessness by improving access to work without risking housing loss.