Benefits - Income Calculation
The calculation of income is one of the most complex parts of the Housing Benefit scheme. The following is just a guide and should not be taken as a guarantee of what income will be used when working out your benefit.
Benefit is worked out by taking an allowance for your living expenses from your total income. This allowance is known an applicable amount. An applicable amount is made up of a claimant's personal allowance, personal allowances for a partner and/or dependent children, and premiums - for example, if you have children or you are disabled. For further information on applicable amounts, please see the links at the bottom of this page.
Most incomes are taken fully into account, including Working Tax Credit and Child Tax Credit. However, with some incomes, a set sum is "disregarded".
On Income Support
If you get Income Support, Jobseekers Allowance (income based) or Guaranteed Pension Credit you will be entitled to your full eligible rent and Council Tax minus any non-dependent charges. For more information about non-dependents, please see the links at the bottom of this page.
Sick or disabled
The following are taken fully into account when assessing benefit
- Incapacity Benefit
- Statutory Sick Pay (this is treated as an earned income and so there is an income disregard)
- Disabled Persons Tax Credit
Disabled Living Allowance (DLA) is completely disregarded. However, we need to know what type of DLA you, your partner or your child gets, as it may increase your applicable amount.
Pensioners
State Retirement Pensions, Savings Credit, private pensions and annuities are taken fully into account. However war pensions are disregarded as are Disabled Living Allowance and Attendance Allowance.
In Paid Employment
The Revenues and Benefits department works out your income by deducting from your gross salary the tax charged, the National Insurance charged and 50% of any superannuation or pension payments. The following weekly disregards then apply:
Single person - £5 per week disregard
Couple - £10 per week disregard
Lone Parent - £25 per week disregard
There is a further £16.05 disregard if you work, have children and work more than 30 hours per week.
If you are self employed your income for benefit purposes will be worked out on your net profit (although some expenses taken by HM Revenues and Customs are not counted for benefit purposes). The above income disregards still apply.
The only exception to this rule are registered child-minders when 2/3 of your income is disregarded as expenses.
Students
Most full-time students cannot get Housing Benefit. For more information see the links at the bottom of this page.
Carers
Carer's Allowance is taken fully into account, as this will increase your applicable amount.
If you have any questions about how your income is worked out, please contact us.