DWP confirms new benefit rules that will affect more than 300,000 claimants

Hundreds of thousands of benefit claimants face new rules around their entitlement from Monday which will enable them to keep more of their income, the government has said.

The changes will apply to more than 325,000 people living in temporary accommodation or supported housing. Under the new system, these residents will no longer see their benefit income hit a “cliff edge” when taking on extra hours at work or longer shifts.

Under the previous rules, someone whose support was topped up by housing benefit – and not provided entirely by universal credit – could be reduced more sharply when their income increased.

This will now instead match universal credit rules, ending a system that the government says was leaving people “trapped people on benefits”. The mechanism sees benefit entitlement reduced by 55p for every £1 a claimant earns, until it reaches zero.

Ministers say the change will strengthen work incentives, estimating that 50,000 young people starting out in their careers will be among those who gain.

Prime minister Andy Burnham said: “People should never have to choose between keeping a roof over their head or being able to work. But 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.”

The number of households living in temporary accommodation in England hit a record 135,580 to the end of March, latest official data shows, housing more than 177,530 children.

Campaigners have called for further action to address the issue, urging ministers to unfreeze housing benefit in next month’s Budget to boost income levels for the poorest renters.

The policy means fewer than two per cent of advertised private tenancies are affordable for those relying on housing benefits, recent research by Citizens Advice found.

Meanwhile, the cost to local authorities also continues to spiral, with councils in England spending a record £2.9bn on temporary accommodation in the year to April.

This equates to just over £8m being spent on these emergency settings every day, up 88 per cent over the last five years.