Universal Credit (UC)
Universal Credit is a means-tested benefit supporting people of working age on a low income. Working age means under state pension age. It replaces six existing means-tested benefits, known as legacy benefits. These are Income-Based Jobseeker’s Allowance, Income-related Employment and Support Allowance, Income Support, Working Tax Credit, Child Tax Credit, and Housing Benefit. If you already receive one of these legacy benefits and your circumstances change, it is recommended that you seek advice prior to claiming Universal Credit.
Your income and capital will affect the amount of Universal Credit you receive. If you have capital over £16,000, you are not eligible for Universal Credit. The first £6,000 of capital is ignored. Capital between £6,000 and £16,000 will affect the amount you receive. Some capital may be disregarded, but you may also be treated as having capital that you do not actually have.
Universal Credit can be applied for online through the Government website.
Child Benefit
You get Child Benefit if you’re responsible for bringing up a child who is:
under 16
under 20 if they stay in approved education or training
Only one person can get Child Benefit for a child.
By claiming Child Benefit, you can get:
an allowance paid to you for each child - you’ll usually get it every 4 weeks
National Insurance credits which count towards your State Pension
a National Insurance number for your child without them having to apply for one - they’ll usually get the number shortly before they turn 16 years old
If you choose not to get Child Benefit payments, you should still make a claim to get the other advantages.
Child Benefit can be applied for online through the How to claim
New Style Jobseeker's Allowance (JSA)
If you are unemployed or work less than 16 hours a week, you may be eligible for New Style Jobseekers Allowance.
This is a contribution-based benefit. You may be eligible if you have paid and/or been credited with enough Class 1 National Insurance contributions in the two full tax years before the calendar year of your claim. The benefit is paid for up to 182 days.
Your savings and capital, and your partner’s savings and capital, aren’t taken into consideration. If you receive any earnings or a private pension, this may affect the amount you receive.
Other conditions for eligibility apply. These include being available for work, actively seeking work, and being under state pension age.
If you are eligible, the weekly rate is £84.80, if you are 25 and over, and £67.20, if you are aged 18 to 24.
You can claim New Style Jobseeker’s Allowance and top this up with Universal Credit if, for example, you have children or housing cost.
New Style Employment and Support Allowance/Contribution-Based Employment and Support Allowance (ESA)
New Style/Contribution Employment and Support Allowance is a benefit for people under state pension age, who have limited capability to work due to an illness or disability and are not receiving statutory sick pay.
As with New Style/Contribution-Based JSA, it is a contribution-based benefit. You must have paid/been credited with enough Class 1 or 2 National Insurance Contributions during the last two full tax years prior to the year you claim.
You will need to have a fit note from your doctor confirming you are not well enough to work. If you have only just become ill, you can self-certify for the first seven days.
New Style ESA does not take into consideration your partner’s income or any savings that you or your partner have. Most of your income is ignored, but if you are receiving an amount from a personal pension, this may affect the amount you receive.
As with JSA, the weekly amount is £84.80 if you are 25 and over, and £67.20 if you are 18 to 24.
As with New Style/Contribution Based JSA, if you do not have enough income to meet your housing and other costs, you may be eligible for Universal Credit as well, providing you meet the criteria for both benefits.
Pension credit
Pension Credit is a means-tested benefit for people who are on a low income and have reached state pension age.
This benefit tops up your weekly income to the following basic amounts for 2023/24:
single person £201.05
couple £306.85
As with Universal Credit, additional payments are paid given if you are severely disabled, or are a carer for someone who is.
In addition, you may be eligible for other means-tested benefits to help with your costs, such as Housing Benefits, Support with Mortgage Interest, and Council Tax Support.
Housing Benefit
Housing Benefit is provided through your local council and is a means-tested benefit to help people on low incomes with their rent.
A claim for Housing Benefit can be made if:
both you and your partner have reached state pension age
you or your partner have been receiving Pension Credit prior to the 15 May 2019
you live in supported, sheltered or temporary accommodation
If you do not fall into one of these categories, and you require assistance with your rent, you should claim Universal Credit.
Support with Mortgage Interest (SMI)
To qualify for a Support for Mortgage Interest (SMI) loan, you need to receive one of the following:
income Support
income-based Jobseeker’s Allowance (JSA)
income-related Employment and Support Allowance (ESA)
Universal Credit
pension Credit
You can start getting a loan:
from the date you start receiving Pension Credit
after you’ve received Universal Credit payments for three consecutive months
after you’ve claimed any other qualifying benefit for 39 consecutive weeks
Support with Mortgage Interest is provided as a loan and the repayment depends on your circumstances when the house is sold, or ownership is transferred. You will also have to pay interest on the loan.
Council Tax support
This benefit is provided by your local council and is a means-tested benefit to help people on a low income with their Council Tax bill.
This benefit is localised and the support you receive depends on your local council’s rules, although they are broadly similar across the country. Council Tax support is:
means-tested and takes into consideration your income and capital.
available to people who live in rental properties or homeowners.
For further details, visit your local council’s website.
Personal Independence Payment
Personal Independence Payment (PIP), is a benefit for people, who are aged between 16 and state retirement age, and have additional care needs due to an illness or disability. If you are in receipt of PIP before you reach state retirement age your claim will continue past state pension age if your additional care needs remain.
PIP is a non-means-tested benefit, so your income and capital are ignored.
PIP is made up of a daily living and mobility component. The daily living element is for the extra help you need with everyday tasks such as preparing meals, washing, dressing, bathing, and managing money. The mobility element considers how far you can walk and any difficulties you may have with making journeys.
If you are awarded this benefit, you should check to see if you are eligible for other means-tested benefits or disability discounts.
The weekly rates for 2023/24 are:
daily living
standard - £68.10
enhanced - £101.75
mobility
standard - £26.90
enhanced - £71.00
Council Tax reduction/discount schemes
Disability Reduction Scheme for Council Tax (Disabled Band Reduction Scheme)
This is a non-means-tested reduction so not dependent based on your income or capital.
Your Council Tax bill can be reduced if you or somebody in your home is ‘substantially and permanently disabled’ and you have:
a room (other than a bathroom, kitchen, or toilet) that is used to meet your needs e.g. for dialysis, treatment or storing of equipment
a second bathroom or kitchen used to meet your needs
enough space in your home to use a wheelchair indoors
If any of these apply, the bill for your home will be reduced to the next lowest band. If you are already in an A brand property, you will have your bill reduced by 17 percent.
The reduction can be backdated, but this may be limited to six years.
Contact your local council for further details and an application form.
Severe Mental Impairment disregard for Council Tax
People who are severely mentally impaired are not included in the calculation of Council Tax liability. To qualify for this benefit:
somebody within your household needs to be diagnosed as having a ‘“severe mental impairment’” that appears to be permanent. This could be due to conditions, such as dementia, severe learning difficulties or another condition that causes a ‘“severe impairment of intelligence and social functioning.’" You will need a certificate from your doctor to confirm the diagnosis.
You also need to receive one of these benefits:
personal Independence Payment (standard or enhanced daily living component), Attendance Allowance (any rate) or Disability Living Allowance (care component paid at the middle or higher rate)
If you meet the criteria and live with one other person who isn’t severely mentally impaired, you will receive a 25% discount on your Council Tax.
If everyone in the house has a severe mental impairment, then an exemption for the whole property is applied and you won’t have to pay Council Tax.
If you are considered severely mentally impaired but live with two or more adults who are not severely mentally impaired, you will not receive a Council Tax discount.
To apply for this benefit, contact your local council. In Wales, there is a national scheme.
Carer Disregard for Council Tax
You are disregarded as an occupant of a property if you are a live-in carer looking after someone. The person you care for cannot be your husband, wife, civil partner, or child under 18. If you do care for a child that is under the age of 18, you can be disregarded if you are not their parent.
You must care for the person for at least 35 hours a week and they must receive one of the following benefits:
any rate of Attendance Allowance
the middle or highest rate of Disability Living Allowance (care component)
any rate of the Personal Independence Payment (daily living element)
an increase in his or her Disablement Pension
an increase in Constant Attendance Allowance
The carer does not have to receive Carer’s Allowance to be disregarded.
Care workers living at a property may also be disregarded for Council Tax purposes.
To be classed as a care worker, you need to:
provide support or care to another person at the same address
be employed to provide support or care to that person, and have been introduced to him or her by a charity or local authority
earn no more than £44 a week
work for at least 24 hours a week
live where the care is provided or on premises that have been provided to enable a better standard of care to be carried out
The information in this article is designed to provide general advice only.
For further information, please contact us by phone at 07462885839 or email at mihaela.legalandtaxadvice@gmail.com
For information on income-related benefits, contribution-based benefits, Universal Credit, tax credits, Council Tax Reduction and Carer’s Allowance