NOTE: This is a revision of the original post issued on 9 July 2026. The Government corrected a drafting error in the original Statutory Instrument (see “Technical Addendum” below).
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 | The Housing Benefit (Earned Income Disregards) (Amendment) (No. 2) Regulations 2026 No. 978 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 There is an equivalent rule change in Northern Ireland.3The Housing Benefit (Earned Income Disregards) (Amendment) Regulations (Northern Ireland) 2026 No. 157
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)
5. The new weekly amounts from 5 October 2026–27 (SI. 2026 No. 978) are:
| Claimant category | Weekly disregard |
|---|---|
| Single or lone parent, under the age of 25 | £61.41 |
| Single or lone parent, aged 25 or over | £77.73 |
| Couple, both under the age of 18 | £97.33 |
| Couple, one or both aged 18 or over but both under the age of 25 | £61.53 |
| Couple, one or both at least aged 25 | £119.70 |
6. They are an addition to the existing HB earnings disregards at Schedule 4 of the Housing Benefit Regulations 2006 (new paragraph 18). They do not replace them. In consequence, the new earned income disregards are beneficial to residents in supported housing seeking to increase their income from employment because they get to keep more of it.
Operational implications
7. 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.
8. DWP are expected to issue an adjudication circular to local authority staff prior to the October commencement but at the date of writing this has yet to be published.
9. There are annual reviews. The disregarded 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
10. 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
11. 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.
12. DWP has committed to ongoing monitoring via administrative HB/RTI data and commissioned independent mixed-methods research into longer-term impacts.
Technical Addendum
13. DWP identified a drafting error in the original Statutory Instrument, SI 2026/753 (The Housing Benefit (Earned Income Disregards) (Amendment) Regulations 2026). DWP corrected the error by making SI 2026/978 (The Housing Benefit (Earned Income Disregards) (Amendment) (No. 2) Regulations 2026).
14. SI 2026/978 keeps the same disregarded amounts as SI 2026/753. It makes the following changes:
- It confirms that the new disregards apply to lone parents.
- It removes the requirement for a claimant to be in “remunerative work” (a term that imposed a minimum average hours requirement). A claimant now qualifies if they, or their partner, are an employed earner or a self-employed earner.
- It allows the disregarded amount to be shared between partners, where a claimant’s earnings are less than the total disregarded amount.
- It clarifies which disregarded amount applies where a claimant and their partner are both under 18 years of age.
First published: 9 July 2026
Last updated: 18 September 2026
© Martin Ward | Philip Parnham 2026
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