You could keep more of your benefits when you start work

If you live in supported housing or temporary accommodation and receive benefits, you may now be able to keep more of what you earn when you start work or increase your hours.

What’s changing?

New rules came into force on 5 October, removing a ‘cliff edge’ that could leave some people worse off when they increased their working hours.

Previously, people living in supported housing or temporary accommodation could receive help with their day-to-day living costs through universal credit, while their rent and housing costs were supported separately through housing benefit.

The two benefits were subject to different rules about how much you could earn before your support started to reduce. For people receiving housing benefit, those rules were less generous than for people whose support was provided entirely through universal credit.

This meant that, in some cases, if you took a job or increased your hours, your housing benefit could fall faster than your earnings increased. You could therefore find yourself with less money overall despite earning more.

For some people, the risk of losing help with their housing costs could even make taking on work feel financially risky.

Who could benefit?

The latest official figures show that 135,580 households in England were living in temporary accommodation at the end of March, a record high, with more than 177,530 children affected.

The government expects the changes to mean that more than 325,000 people living in supported housing and temporary accommodation will be able to keep more of what they earn when they start work or increase their hours.

This includes almost 50,000 young people who are starting out in employment.

The changes are intended to bring the way housing benefit is calculated more closely in line with universal credit, strengthening the financial incentive to work or increase your hours.

What does this mean for you?

If you live in supported housing or temporary accommodation, the changes could mean that you are better off when you:

• start a new job
• increase your working hours
• increase your earnings
• move towards greater financial independence

The exact impact will depend on your individual circumstances and the benefits you receive.

The government says the changes are part of its wider aim of moving from a welfare state towards a “working state”.

Prime minister Andy Burnham said:

“People should never have to choose between keeping a roof over their head or being able to work.”

He said the changes would help people keep more of what they earn and provide greater financial security for families.

More changes could follow

Campaigners have called for further action on housing support. They have urged ministers to unfreeze housing benefit in the upcoming autumn budget, which they say could increase support for some of the poorest renters.

Are you getting all the benefits you’re entitled to?

Working out what financial support you can claim isn’t always easy, particularly if you live in supported housing or temporary accommodation.

But you don’t have to work it out alone.

Use our benefits calculator or get in touch to see if you’re getting all the support you’re entitled to.