New rules since 5 October are meant to end a cliff edge for supported housing residents who work more hours. The same regulation created that exact threshold, and ministers had to rewrite it before it took effect.
Estimated reading time: 6 minutes
In short. A DWP press release dated 5 October 2026 says new rules ending a work-incentive "cliff edge" for over 325,000 supported housing and temporary accommodation residents are in force from that day [[1]]. The regulation that created the new earnings disregard, laid in July, made it conditional on the claimant already being in "remunerative work", a minimum average hours test [[2]][[3]]. A second regulation, made two months later and brought into force three days before the first, had to strip that condition out [[3]]. Two documented mistakes: four stars.
A Department for Work and Pensions press release published on 5 October 2026 announces that "more than 325,000 residents in supported housing and temporary accommodation will no longer face a drop in income when increasing their working hours, under new rules coming into force today" [[1]]. Prime Minister Andy Burnham is quoted saying the system "has been rigged against some of the very people trying their hardest to get on, particularly young people starting out, who are being left worse off for earning more", and Sir Stephen Timms, Minister for Social Security and Disability, says the change means "residents keep more of their earnings, and so that working more hours leaves people better off than staying on benefits" [[1]]. Centrepoint's chief executive is quoted too, welcoming the change for young people who "felt trapped, unable to increase their hours" and adding that "the changes will mean most young people will not experience the stark financial cliff edge they once faced" [[1]].
What the new rule actually says
The mechanism sits in The Housing Benefit (Earned Income Disregards) (Amendment) Regulations 2026, S.I. 2026/753, made on 6 July 2026 and brought into force on 5 October 2026, the date in the press release [[2]]. It inserts a new paragraph 18 into Schedule 4 of the Housing Benefit Regulations 2006, setting five weekly earnings disregards for residents of "specified accommodation" and "temporary accommodation", the statutory terms for supported housing and temporary placements, ranging from £61.41 for a single claimant under 25 to £119.70 for a couple where one partner is 25 or over [[2]]. The point of the disregard, DWP's own Explanatory Memorandum explains, is to smooth the "cliff-edge" drop in income that happens when a claimant's earnings push their Universal Credit award to zero and Housing Benefit, which treats earnings less generously, becomes their only means-tested support [[4]].
But S.I. 2026/753 as made did not simply hand that disregard to anyone who works. Its new paragraph 18(1) restricted it to "a claimant who is engaged in remunerative work as an employed earner or a self-employed earner" [[2]]. "Remunerative work" is not a stray phrase; a second regulation, made just two months later, explains exactly what it does. The Housing Benefit (Earned Income Disregards) (Amendment) (No. 2) Regulations 2026, S.I. 2026/978, made on 7 September 2026 and brought into force on 2 October 2026, three days before S.I. 2026/753 itself took effect, rewrites that same paragraph. Its own explanatory note says the change "removes any requirement for the claimant to be engaged in remunerative work (a term which imposes a minimum average hours requirement) in order to be eligible for the new disregard, and instead requires a claimant, or their partner, to be an employed earner or self-employed earner" [[3]].
Put plainly: the regulation that was supposed to stop supported housing residents losing out for working more hours originally required them to already be working a minimum number of hours before the new disregard applied at all, the same kind of hours threshold the policy exists to dismantle. A resident moving from no work, or from hours below that threshold, into a few hours of paid work would have got no disregard under the rule as laid in July. DWP caught this before S.I. 2026/753 ever took effect and used S.I. 2026/978 to fix it three days ahead of commencement, so no claimant was ever assessed under the flawed version. The correction came from inside the department, not from a court challenge or outside scrutiny, which is worth stating plainly; it does not change that the first published text of a headline work-incentive reform built in exactly the obstacle to working more hours that the reform was announced to remove.
The gain nobody has to put a number on
The press release and the three ministers and one charity chief executive quoted in it all frame the change as a straightforward financial win: residents will "keep more of what they earn" [[1]]. DWP's own Explanatory Memorandum to S.I. 2026/753 is less definite. "The new earned income disregards will enable most claimants to retain more of their income as they progress in employment," it says, immediately adding: "The level of financial gain will vary depending on individual circumstances and may be lower for those with higher total award" [[4]]. No figure anywhere in the Memorandum states what a typical resident actually gains in pounds, and the Memorandum confirms there is no formal mechanism to check later whether the gain materialises: "The instrument does not include a statutory review clause" [[4]]; monitoring is limited to the department's own ongoing use of internal administrative data and commissioned research "to understand the ongoing impacts of the policy" [[4]]. The same document puts the affected population at "around 300,000 households claiming Housing Benefit" in supported housing or temporary accommodation [[4]], a households figure the press release's "more than 325,000 residents" does not actually contradict, since a household can hold more than one resident, but the Memorandum itself never states a residents total, so the press release's number has no visible source in the document it is meant to be describing.
The claims, tested
| The document's own words | What the record shows | Verdict |
|---|---|---|
| "More than 325,000 residents in supported housing and temporary accommodation will no longer face a drop in income when increasing their working hours, under new rules coming into force today" [[1]] | The regulation creating that disregard, S.I. 2026/753, made the disregard conditional on the claimant already being in "remunerative work", a minimum average hours test [[2]]; a second regulation, S.I. 2026/978, had to remove that exact condition three days before the first commenced, because it "imposes a minimum average hours requirement" [[3]] | The reform as originally laid would have withheld the disregard from residents moving into low-hours work, the group the "cliff edge" framing is centred on; the flaw was corrected before anyone was assessed under it, but only after the department's own second look |
| "Residents keep more of their earnings, and so that working more hours leaves people better off than staying on benefits" [[1]] | DWP's own Explanatory Memorandum: "The level of financial gain will vary depending on individual circumstances and may be lower for those with higher total award," and "the instrument does not include a statutory review clause" [[4]] | The size of the promised gain is undefined in the department's own policy document, and there is no statutory mechanism to check it later |
Credit where due
The underlying problem is real and well evidenced: DWP's own Explanatory Memorandum traces it to the Work and Pensions Committee's 2023 report on employment support, backed by years of case evidence from St Mungo's, Centrepoint, Crisis and other housing charities named in the consultation record [[4]]. Unlike many announcements this site has checked, this one comes with a published, dated, numbered legal instrument attached, and a second instrument that shows the department correcting its own drafting before anyone was affected by the mistake, which is the system working roughly as it should. The disregard amounts themselves, up to £119.70 a week for some couples, are a genuine increase in what a working resident can keep, not a gesture.
Verdict
Four stars, two documented mistakes. The reform addresses a real and long-documented work disincentive, and the correcting regulation shows DWP catching its own error in time to stop any claimant being affected by it. But the press release markets a clean, settled fix on the day it takes effect without mentioning that the measure's first published form carried the same kind of hours threshold it was meant to abolish, and without ever stating, in the policy's own impact paperwork, how much a typical resident actually gains or how that gain will be checked.
The star score counts two documented mistakes: first, S.I. 2026/753 as made on 6 July 2026 restricted the new earnings disregard to claimants already in "remunerative work", a minimum-hours condition that S.I. 2026/978 had to remove on 7 September 2026, before the first regulation ever came into force on 5 October 2026; second, DWP's own Explanatory Memorandum states the financial gain from the change "will vary" and "may be lower" for some claimants without giving a figure, and confirms the instrument carries no statutory review clause. Two falls in the 1 to 3 band: four stars; the bands are on the ratings page. This piece makes no finding about the conduct of any named individual. All four sources below were fetched directly on 12 October 2026; none returned an error.
Sources
- Supported housing residents to keep more of what they earn as new rules come into force, Department for Work and Pensions, published 5 October 2026
- The Housing Benefit (Earned Income Disregards) (Amendment) Regulations 2026 (S.I. 2026/753), made 6 July 2026, in force 5 October 2026
- The Housing Benefit (Earned Income Disregards) (Amendment) (No. 2) Regulations 2026 (S.I. 2026/978), made 7 September 2026, in force 2 October 2026
- Explanatory Memorandum to the Housing Benefit (Earned Income Disregards) (Amendment) Regulations 2026 (S.I. 2026/753), Department for Work and Pensions