Topics
Summary
1. From 5 October 2026 five new earned income disregards apply to Housing Benefit for working-age residents in specified supported accommodation and temporary accommodation.1The Housing Benefit (Earned Income Disregards) (Amendment) Regulations 2026 No. 753 This closes the “cliff-edge” where a resident’s Universal Credit tapers to zero as earnings rise, then standard HB earnings rules kick in and are less generous — leaving residents worse off despite working more.
2. Accommodation counts as “specified accommodation” if it meets the legal definition found in paragraph 3A of Schedule 1 to the Universal Credit Regulations 2013.
3. The change applies in England, Wales, and Scotland, and is estimated to affect around 300,000 households nationally.2Explanatory Memorandum To The Housing Benefit (Earned Income Disregards) (Amendment) Regulations 2026 2026 No. 753 para. 5.5
Why this matters for supported housing residents
4. Residents who are in work, or considering taking on more hours, before the commencement date of the amendment risk a real income drop once their UC entitlement ends and HB means-testing takes over. This has been a known disincentive to work for this client group. The disregards are designed to smooth that transition so increased earnings translate into increased income.
Weekly earned income disregards (2026-27)
| Claimant category | Weekly disregard |
|---|---|
| Single, under 25 | £61.41 |
| Single, 25 or over | £77.73 |
| Couple, both under 18 | £97.33 |
| Couple, both under 25 | £61.53 |
| Couple, at least one 25+ | £119.70 |
5. These sit alongside existing HB earnings disregards and are added to Schedule 4 of the Housing Benefit Regulations 2006 (new paragraph 18).
Operational implications
6. No action is required from residents. Local authorities should apply the disregards via an automated IT update to HB systems; there is no new administrative process for providers.
7. DWP will issue an adjudication circular to local authority staff ahead of the October commencement.
8. There are annual reviews. The disregard amounts will be uprated each year in line with UC changes, taper rate changes, and statutory review obligations under s.150 Social Security Administration Act 1992. As a result, figures will need refreshing in future benefits advice.
Talking to residents
9. It is worth support workers talking to residents who are considering working, or hesitant to increase hours over cliff-edge concerns. From October 2026 more of the residents’ earnings will be protected from HB deductions. They will not have to complete any new forms or reapply for HB. Changes are automatically applied by the local authority.
Background
10. The change follows concerns raised in the Work and Pensions Committee’s July 2023 report, Plans for Jobs and Employment Support, and reflects sustained sector pressure to align HB earnings treatment with UC for this client group.
11. DWP has committed to ongoing monitoring via administrative HB/RTI data and commissioned independent mixed-methods research into longer-term impacts.
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