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Guidance

HB A9/2026: New earned income disregards in Housing Benefit for Working Age residents

Updated 24 September 2026

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Who should read

All Housing Benefit colleagues and wider if appropriate.

Action

For information.

Subject    

New earned income disregards in Housing Benefit (HB) for Working Age residents in specified accommodation and temporary accommodation.

Guidance manual

The information in this circular does affect the content of the HB Guidance Manual.

Queries

For queries about the

Extra copies of this circular and copies of previous circulars can be found at Housing Benefit for local authorities: adjudication circulars.

Crown Copyright 2026.

Recipients may freely reproduce this circular.

Introduction

1. This circular provides local authorities (LAs) with information about new earned income disregards in Housing Benefit (HB) for Working Age residents living in specified accommodation and temporary accommodation.

2. On 6 July 2026, the new disregards have been introduced through the Housing Benefit (Earned Income Disregards) (Amendment) Regulations 2026. The regulations are due to come into force from 5 October 2026 and will apply automatically to new and existing HB claims where the claimant meets the eligibility criteria.

3. The Housing Benefit (Earned Income Disregards) (Amendment) (No.2) Regulations 2026 were laid on 7 September 2026. These regulations make further amendments to ensure the new earned income disregards operate as intended from 5 October 2026. These amendments do not change the underlying policy objective of introducing additional earned income disregards for eligible Working Age HB claimants.

Background

4. Around 300,000 households claiming HB live in specified accommodation or temporary accommodation and face greater challenges when transitioning into work, in comparison to those who reside in ‘general needs’ accommodation who receive the housing element of Universal Credit (UC) rather than HB.

5. At the Autumn Budget 2025, the government announced new earned income disregards in HB for Working Age residents living in supported housing (specified accommodation) and temporary accommodation. The new disregards were developed to address a work disincentive and reduce the financial cliff-edge that can arise for claimants living in specified accommodation and temporary accommodation who receive UC for their living costs while continuing to receive HB for their rent.

6. As a claimant’s earnings increase, their UC entitlement is reduced through the UC taper. When UC entitlement ends, the claimant may continue to receive HB only, with earnings taken into account under HB rules. For some claimants, this can result in a reduction in HB that is greater than the increase in earnings, causing overall income to fall despite working more or earning more. This is the ‘cliff edge’ referred to in the Explanatory Memorandum to the Housing Benefit (earned income disregards) (amendment) Regulation 2026.

7. The new disregard amounts were informed by analysis of the point at which affected claimants would otherwise begin to experience a reduction in overall income when moving from receiving both UC and HB to receiving HB only. The disregards are intended to smooth that transition by increasing the amount of earnings disregarded in the HB calculation.

8. The disregard levels are not intended to replicate UC entitlement or remove all reductions in benefit as earnings increase. They are designed to mitigate the specific cliff-edge effect that can arise from the interaction between UC and HB for these claimants.

What is changing

9. The new disregards will operate consistently across different types of Working Age claimants and claim status.

10. The new disregards will apply when calculating earnings from employed or self-employed work. This means the relevant weekly amount will be ignored when assessing a claimant’s earnings for HB purposes, where the claimant meets the accommodation and work-related conditions. There is no minimum-hours requirement. The new disregards apply in addition to the existing standard earnings disregard for which the claimant qualifies under the normal HB rules. They do not replace that disregard. Any other applicable earnings disregards, including the additional earnings disregard, should continue to be considered in accordance with the existing HB rules and the conditions that apply to them. The total amount disregarded cannot exceed the earnings available to be taken into account.

11. The regulations set out five weekly disregard amounts, depending on the claimant’s age and household circumstances:

  • single claimants and lone parents aged under 25 is £61.41
  • single claimants and lone parents aged 25 or over is £77.73
  • couples where both members are under 18 is £97.33
  • couples where at least one member is aged 18 or over but both are under 25 is £61.53
  • couples where at least one member is aged 25 or over is £119.70

12. The values of the new disregards will be annually reviewed to align with any uprating of UC as well as any future changes made to the UC taper.

13. The new provision uses the UC definitions of specified accommodation and temporary accommodation. LAs should therefore continue to identify eligible accommodation using the existing definitions and guidance.

IT changes for LAs

14. LA Information Technology (IT) software providers are making the necessary changes to LA IT software systems so the new earned income disregards can be applied correctly from 5 October 2026.

15. LAs should liaise with their IT software provider to confirm release timing, testing arrangements and any local implementation steps.

16. LAs should raise any technical queries with their IT software provider.

Communicating with claimants

17. LAs should continue to advise claimants to report changes in their circumstances, including changes to earnings, employment status, household composition or accommodation type, in the usual way.

18. Further communications material will be issued separately to support consistent messaging for residents, charities, housing providers and Department for Work and Pensions (DWP) jobcentre staff.

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