When you make a claim for Housing Benefit or for a Council Tax Reduction you must give us details of all income and savings for you, your partner and in some cases your children. You must provide original documents as proof of your income and capital.
The amount of income you get will not usually be the same as the amount we use to work out your benefit. The income we use will be made up as follows:
- Net income from earnings.
- State Benefits e.g. pension credits, state retirement pension, Job Seekers Allowance, Tax Credits etc.
- Savings and capital, including shares, investments, land and other assets.
- Private Pension.
- Other income not earned e.g. maintenance payments, rent from sub tenants.
Some types of income and state benefits you might get are not used when we work out your Housing Benefit or Council Tax Reduction BUT you must provide details of ALL income, savings etc. This is important because if you get some types of state benefits then your applicable amount may be higher and the amount of Housing Benefit and/or Council Tax Reduction may also be higher.
The amount we use as your net earned income will not necessarily be the same as that shown on your payslip. Instead we will use your gross pay and take away the income tax, national insurance contributions and half of any pension contributions you make.
Savings, Capital and Assets
Any assets you have like savings, shares, investments, property or land will be added together to give the total value of capital assets you own.
There are some exceptions and the value of your own home will not be included.
If your assets are more than £16,000 then you will not normally qualify for any Housing Benefit and/or Council Tax Reduction.
For people of working age, any assets up to £6,000 are not counted but every £250 or part of over this limit is counted as £1.00 income. Therefore if you have assets of £6,252 you will have a notional income of £2.00 per week which will be added to your income and used when we work out your Housing Benefit and/or Council Tax Reduction.
People who have reached the qualifying age for state pension credit, can have savings of up to £6,000 this will not be counted. For savings above this limit £1.00 in every £500 will be counted towards your income.
The income we use for benefit purposes can be lowered depending on your circumstances and what kind of income it is. We do this so that you can earn more money before we begin to reduce the amount of benefit you might get.
The four main types of income disregards are explained below and any of them can apply to you but you can only qualify for one of the disregards for working 30 hours per week or 16 hours per week.
Other disregards are available where all or part of the income is disregarded. We will apply all of those disregards which fit your own circumstances.
Earned Income Disregards
For people who are in paid work, the table below shows the disregard amounts for each group of people. If you fall into more than one group, only the one of greatest value will be used to work out your income for benefit purposes.
|Certain people who are disabled or long term sick
|Certain carers and certain people in the emergency services
|Children who qualify for Disabled Child Premium
Child Care Disregards
If you are in paid work you may also qualify for a reduction if you pay child care costs to one of the following:
- a registered child minder,
- a child minding scheme run by a school or local council,
- child care approved for tax credits purposes,
- any other out of school hours scheme provided by a school on school premises or by a local council where the child is aged 8 or more.
The weekly amount disregarded will be your costs up to a maximum of £175.00 for one child or £300.00 for two or more children.
30 Hours per Week Disregard
If you or your partner work for 30 hours or more each week then you may also get a further disregard of £17.10 per week providing you fit one of the following groups.
- You or your partner receive working tax credit which includes the £17.10 addition for working 30 hours or more each week.
- You or your partner work for 30 hours or more each week and are aged 25 or more.
- A couple where one works for at least 16 hours each week and between them work for at least 30 hours each week, with one or more dependant children.
- A lone parent who works for 30 hours per week or more.
- You (or your partner) work for at least 30 hours per week and
either of you receives disability premium or higher pensioner premium and works for at least 16 hours per week.
16 Hours per Week Disregard
If you do not qualify for the 30 hours per week disregard you may qualify under this category providing:
- you work for at least 16 hours per week and,
- you are paid or could be paid working tax credit and,
- you fall within one of the following groups:
- lone parents,
- couples with children,
- a person aged 50 or over working for at least 16 hours per week and are entitled to the 50 plus element of working tax credit,
- disabled people,
- certain people aged 50 or over.
(If part of a couple, the disabled person or person over 50 must be the person working at least 16 hours per week).
Once we have worked out the total income to be used in calculating your benefit we compare this to your applicable amount. If the income is more than the applicable amount then this is called excess income.
Any excess income you have will affect the amount of benefit you will get. Your Housing Benefit will be reduced by 65% of your excess income and your Council Tax Reduction will be reduced by 20%.