UK housing benefit reform lets residents keep more of their pay

People in supported housing and temporary accommodation can now keep more of their earnings when they take a job or work extra hours, following a change to UK benefit rules. The reform took effect on 5 October and covers more than 325,000 residents, including nearly 50,000 young people, according to the government.

Previously, residents often received Universal Credit for everyday living costs and separate Housing Benefit payments for rent. The two benefits treated earnings differently. As wages rose, housing support could fall so sharply that some people ended up worse off despite working more.

The new rules change how much earned income is counted when calculating Housing Benefit, bringing it into line with Universal Credit. The government says no group will be made worse off by the reform, although the immediate financial gain will vary.

Homelessness charities Centrepoint and St Mungo’s welcomed the change. Centrepoint said young people had felt unable to increase their hours, change jobs or build savings without losing out financially. It expects most young residents to avoid the steep loss of support they previously faced. St Mungo’s, which had long campaigned for reform, said the change would help more people use their skills and build financial independence.