Income and savings (capital) and benefit claims

We don’t count some types of income in the figure we use to work out benefits. Known as disregarded income.

Some of the types of income we don’t count include:

• child maintenance
• Child Benefit
• War Widows Pensions
• War Disablement Pensions
• Local Authority fostering allowances
• Some charity payments, such as those from the McFarlane Trust (some other charity payments are counted in part or in full)
• payments from the Windrush compensation scheme payments or from a scheme established or approved by the Secretary Of State for the purpose of providing compensation in respect of historic institutional child abuse in the UK
• Disability Living Allowance, Personal Independence Payments, Attendance Allowance

You must still tell us if you get any of these.

We also don’t count:

• Carers Allowance in Council Tax Support claims for working age customers
• Industrial Injuries benefit or Industrial disablement benefit in Council Tax Support claims for working age customers

If you get any of these payments, it’s important to tell us because you might be able to get more Housing Benefit or Council Tax Support, or both.

The amount of income that we count when we work out your benefit depends on what deductions we can make from your total income figure. We deduct tax, national insurance, and half of any pension payments you make. We may also reduce the amount of income that we count in other ways, depending on your circumstances.

Deductions for working people

If you are working at least 16 hours a week, we deduct the following amounts from your earned income per week when calculating your Housing Benefit:

The amount we deduct from your earned income when calculating your Council Tax Support claim depends on whether you are working age or Pension Credit age.

Additional earnings disregard

We reduce the amount of income we count towards your Housing Benefit claim by an extra amount called ‘additional earnings disregard’ if you or your partner are 25 or over and work at least 30 hours a week.

We also apply additional earnings disregard if you or your partner works 16 hours a week or more, is entitled to Working Tax Credit, and you are one of the following:

• a single parent
• a couple with children
• a member of a couple where one person is disabled
• age 50 or more

If you are away from work because of maternity or paternity leave, adoption leave, or sickness, you can still get additional earnings disregard as long as you are getting Working Tax Credit.

Additional earnings disregard means we take another £17.10 off the income we count towards your claim.

Deductions for childcare costs

We can sometimes reduce the amount of income we count for your claim if you pay childcare costs to a registered childminder, nursery or playgroup, or a school or council out-of-hours scheme.

You can get this extra help if any of the following apply:

• you are a couple and you both work 16 hours a week or more
• you are a couple and one works 16 hours a week or more and the other is considered unable to work
• you are a single parent and you work at least 16 hours a week
• you receive Universal Credit, work and childcare costs are included in your Universal Credit award

You might also be able to get the childcare costs deduction if any of the following apply:

• you get working tax credits
• you are off work because you are sick
• you are on maternity or paternity leave

We can deduct what you pay in childcare costs up to £175 a week for the first child, and up to £300 a week for 2 or more children.

You can get this help up to the first Monday in the September after the child’s 15th birthday. 

More information on childcare is available from the Family Information Service.

Deductions against rent income you get

If you get an income from rent, we can make a deduction for a proportion of the costs.

Rent from lodgers

If someone lives with you as a lodger paying rent that includes money for meals, we will take off 20% of the amount you get for rent. We will treat 50% of the rest as unearned income.

Rent from tenants

If you have tenants whose rent doesn’t include any money for meals, we will take off 20% from the rent amount. We will treat the rest as unearned income.

If you are self-employed and have been for more than a year, we need you to give us a full year’s trading figures. If you are just starting out, you can either give us an estimate of income and expenses for the first few months, or we can make an estimate based on the number of hours you plan to work.

Where self employed people are in a partnership, we divide the pre-tax profit equally between partners unless there is a formal agreement dividing the profit differently.

We can only allow expenses directly related to running the business, unless you are a childminder.

Income figures if you are a self-employed childminder

If you are a self-employed childminder, we don’t ask for your actual expenses. Instead, we don’t count (disregard) two thirds of what you earn, and count only the remaining third as your income.

People of working age and capital

Housing Benefit

If you are working age, you can only get Housing Benefit if you have less than £16,000 in capital.

The first £6,000 in capital doesn’t affect your claim. For every £250 (or part) over £6,000, we add £1 to your income figure.

Council Tax Support

If you are working age, you can only get Council Tax Support if you have less than £6,000 in capital. Any capital below £6,000 will not affect your claim.

People of Pension Credit age and capital

If you are Pension Credit age, you can normally only get Housing Benefit and Council Tax Support if you have less than £16,000 in capital. If you get Guarantee Pension Credit, you might be able to claim even if you have more than £16,000.

The first £10,000 doesn’t affect your claim. For every £500 (or part) over this amount, we add £1 to the income we count when we work out your claim.

Capital that doesn’t affect your claim

Some types of capital are disregarded (not counted) when we work out claims. This means they don’t affect whether you can claim or the amount you can get. Types of capital we disregard include: 

• the home you live in
• a previous home that is on the market to sell (disregarded for up to 26 weeks)  
• any property you own where an elderly or disabled relative lives
• a future interest in property
• a property you don’t live in but are taking legal action in order to get the right to occupy
• money from the sale of your house which is to be used to buy another property (disregarded for up to 26 weeks)
• benefit payments due to you but that haven’t been paid
• special government payments, such as, former prisoners of war, Creutzfeldt-Jakob disease (CJD) compensation payments or Secretary Of State approved compensation in respect of historic institutional child abuse in the UK. This list is not exhaustive.