Money · Benefits

Housing Benefit from 5 October: how much you can earn without losing the benefit

From 5 October 2026 five new earnings thresholds apply in Housing Benefit — from £61.41 to £119.70 a week depending on age and household. That money is ignored when the benefit is worked out. It applies to people in supported housing or in council temporary accommodation: more than 325,000 people across the UK. There is nothing to claim — councils recalculate it themselves.

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A quiet residential street in London: brick houses, trees, cars at the kerb — A residential street in London. Supported housing and council temporary accommodation are most often ordinary flats in houses like these, not hostels. Photo: ONLYWAY NEWS

From 5 October 2026 Housing Benefit is worked out under new rules. For people living in supported housing or in temporary accommodation provided by a council, part of what they earn is now simply ignored in the calculation. There are five thresholds, set by age and household.

How much earned income is ignored?

These are weekly amounts, taken off earnings before the council starts reducing the benefit:

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single person or lone parent under 25 — £61.41;
single person or lone parent 25 or over — £77.73;
couple, both under 18 — £97.33;
couple, one or both aged 18 to 24 — £61.53;
couple, at least one aged 25 or over — £119.70.

The new thresholds do not replace the existing earnings disregards — they are added to them, so a working tenant is better off than before 5 October. The amounts will be reviewed each year in line with Universal Credit.

Who does it apply to?

Working-age people on Housing Benefit who live in what the rules call specified accommodation — supported housing, refuges, hostels for people leaving homelessness, housing for people recovering from addiction or fleeing domestic abuse — and people in council temporary accommodation. The government estimates more than 325,000 people, including almost 50,000 young people just starting work.

If you rent privately and claim Universal Credit, this change does not touch you: that system has its own taper and its own 55p-in-the-pound rule.

What was wrong before?

Tenants in this kind of housing get their rent through Housing Benefit and the rest through Universal Credit. While a person worked few hours, Universal Credit tapered away gently. But as soon as earnings reached the point where Universal Credit ran out, the old Housing Benefit rules took over — and they were far harsher. Extra hours brought a rise in pay and an almost equal fall in benefit, so people hit that ceiling and were afraid to take more shifts.

That is the cliff edge the government is removing. The social security minister, Sir Stephen Timms, sums up the point of the reform simply: working more hours should pay better than staying on benefits. Centrepoint, the youth homelessness charity, says young tenants used to feel trapped — taking a full-time job meant ending up poorer.

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What should a tenant do?

Nothing. There is no claim to make: councils recalculate the benefit themselves, and the change took effect in their systems on 5 October. The regulations were laid before Parliament on 6 July 2026.

It is still worth checking. If you work and live in supported housing, look at your next award letter and see whether the figure has changed. If your earnings vary from month to month, ask your council’s benefits team which of the five thresholds they are using for you: that decides how much you keep.

What does it mean in practice?

For a single person aged 25 or over, the first £77.73 earned in a week no longer touches the benefit at all. That is roughly eight hours at the minimum wage — one full shift a week that used to be swallowed almost entirely by the benefit reduction, and now stays with the worker.

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Published 5 October 2026, 05:42 4 min read Editorial desk of the British newspaper ONLYWAY NEWS - LONDON - UK

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