A new Department for Work and Pensions (DWP) rule that came into force on Monday 5 October will allow around 325,000 residents across England in supported housing and temporary accommodation to keep more of what they earn when they take up work or increase their hours.
Under the previous system, people living in supported housing and temporary accommodation received help with day-to-day living costs through Universal Credit (UC), while support for their rent was paid separately through Housing Benefit. This framework put restrictions on 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 UC. As a result, 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. In some cases, the fear of losing support with housing costs acted as a disincentive to take on work.
What the DWP changes mean
The changes will help make sure that people living in supported housing and temporary accommodation - including nearly 50,000 young people who are starting out in employment - are better rewarded for taking up work or increasing their hours. The new rules will end the "cliff edge" loss of income faced by those affected when they increase their working hours.
The announcement comes as part of the Government's wider plan to move from a welfare state to a working state, supporting people into work and financial independence.
Andy Burnham hails new DWP rule
Announcing sweeping reforms earlier this week, Andy Burnham said "people should never have to choose between keeping a roof over their head or being able to work". The Prime Minister added: "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," he said.
Sir Stephen Timms, Minister for Social Security and Disability, said: "For too long, the system has been doing the opposite of what it should. 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," he added. "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."
