Homelessness charities have welcomed a decision by the Department for Work and Pensions to exclude supported accommodation from universal credit.

Charities had raised concerns that universal credit, which combines a number of benefits including housing benefit from 2013, would not take into account the extra costs of providing supported housing. Under the current system, an ‘exempt accommodation rule’ means the extra cost of managing accommodation for a vulnerable person is taken into account.

Homeless Link, an umbrella group of homelessness charities, had warned of a ‘vacuum’ because no organisation would have responsibility for housing costs for vulnerable people.

Lord David Freud, welfare reform minister, last week announced help towards costs of supported housing will be met outside universal credit. This means housing costs will be managed by local authorities as at present.

Homeless Link welcomed Lord Freud’s announcement.

A spokesperson said: ‘We asked DWP to slow down. The risks in getting it wrong are too high. The good news is that the government has listened.

‘Clearly this is just one aspect of welfare reform that will affect homelessness services. There is still much to be done in other areas. However, it is a major coup – and on this point at least we now have time to work with DWP to help develop a solution that works.’