The Department for Work and Pensions (DWP) has confirmed a major rule change has come into force affecting 325,000 claimants. The UK government has announced that residents in supported housing and temporary accommodation will "keep more of what they earn" when they take up work or increase their hours.
In an update published on October 5, the DWP confirmed people will no longer face a drop in income when increasing their working hours. Under the previous system, people living in supported housing and temporary accommodation often received help with their day-to-day living costs through Universal Credit, while support for their rent was paid separately through Housing Benefit.
Housing Benefit rules
The two systems had different rules about how much someone could earn before their benefits started to be reduced. For people receiving Housing Benefit, those rules were less generous than for people whose support was provided entirely through Universal Credit. According to the government website, some residents who moved into work or increased their hours could see their Housing Benefit reduced more quickly, leaving them worse off despite earning more.
The government said: "This created a cliff edge that trapped people on benefits rather than supporting them into work and financial independence." The reforms will help make sure that people living in supported housing and temporary accommodation are better rewarded for taking up work or increasing their hours. This will change how Housing Benefit is calculated so it aligns with Universal Credit, strengthening work incentives for more than 325,000 residents in supported housing and temporary accommodation.
Statement from Andy Burnham
In a statement, the Prime Minister said: "People should never have to choose between keeping a roof over their head or being able to work. But 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."
"We're putting that right through a common-sense change that will help people keep more of what they earn. This is what progressive welfare reform looks like: helping people into work and giving families the security and breathing space they need to get on. That's how we make Britain better off."
'We're putting it right'
Sir Stephen Timms, minister for social security and disability, said the system has been "doing the opposite of what it should" for too long. He said: "It discouraged some of the most vulnerable residents from working rather than helping them into jobs. We're putting that right, so that residents keep more of their earnings, and so that working more hours leaves people better off than staying on benefits."
"This is a promise from our Autumn Budget now being put into action, and it's part of a much bigger effort to overhaul a welfare system that has trapped too many people in dependency for too long. We're building a system that rewards work and lets people hold on to more of what they earn, while continuing to protect those who need it most." The rule change came into force on Monday, October 5.
