The government says that more than 300,000 residents in supported housing and temporary accommodation will no longer face a drop in income when increasing their working hours, after new rules were laid out in parliament this week.

According to the government, the system it inherited left vulnerable people in supported housing having to choose between staying out of work or risk losing their housing support, because the work allowance was higher for Universal Credit than it was for Housing Benefit.

The less generous rules for Housing Benefit created a cliff edge that trapped people on benefits rather than supporting them into work. Some landlords even discouraged residents from taking jobs to protect their own rental income.

The regulations change how Housing Benefit is calculated so it works in the same way as Universal Credit – a change that will incentivise work for 315,000 people when they come into force in October 2026, the government says.

Sir Stephen Timms, Minister for Social Security and Disability, said: “The system we inherited was actively pushing some of the most vulnerable residents away from work rather than towards it. These changes fix that – ensuring residents can keep more of what they earn, so that taking a job or increasing hours always pays better than benefits.

“This announcement delivers on a commitment made in our autumn budget, and forms part of the government’s wider plan to reform the welfare system – tearing out the barriers that have trapped people in dependency.

“We are replacing that system with one that rewards work and ensures people keep more of what they earn, while protecting those who need it most.

“Today’s rules come alongside previous steps to help people on disability benefits that want to work, into work. We have already rebalanced Universal Credit to tackle the perverse incentives that discouraged work and introduced Right to Try legislation, allowing sick or disabled people to try work without the immediate fear of reassessment.

“These measures come alongside our Connect to Work programme, which delivers tailored, personalised, local support that will help 300,000 people into work, and the deployment of 1000 Pathways to Work advisers to help those written off by the previous government.”

John Glenton, Chief Care and Support Officer at housing association Riverside, said: “Being able to access work is a crucial step for a person’s independence. This is an important piece of legislation which will enable more people to get back into work and play an active role in society and their community.

“The financial cliff edge faced by supported housing and temporary accommodation residents who were working, has been another barrier placed in the way of people who are already trying to overcome a variety of hurdles as they work to rebuild their lives.

“This move comes in a week that we mark Youth Employment Week. At a time when more than one million young people (aged 18-24) in the UK are not in education, employment or training (NEET), it is particularly important to remove the barriers which enable our young people to get on in life.”