How does the tax credit ‘disabled child element’ affect housing benefit?

3 mins read

Tuesday 20 December 2016

Update in October 2020: The extra amount you’d get a week is now £92, up from £84.

The recent news that 28,000 families are to receive extra child tax credit has prompted questions from parents about the effect these extra payments might have on other ‘means-tested’ benefits.

When an award of Disability Living Allowance (DLA) is made for a child you should tell the Tax Credit Office. They will add an extra element – the disabled child element – to your tax credit award no matter what rate or component of DLA has been awarded. A second ‘severely disabled child element’ will also be added if the DLA award is for the highest rate of care.

Will these extra amounts affect my other benefits?

Although your income has increased by up to £84 per week, this should have no effect on the amount of Income Support, Housing Benefit and any other ‘income- based’ benefits that you receive.

For Income Support, Child Tax Credit is ignored as income, but for Housing Benefit the rules are not as straight forward. This is because tax credits are treated as income for Housing Benefit, so, generally speaking, the more tax credits you get, the less Housing Benefit you are entitled to, and the more you have to pay towards your rent.

However, when the increase in tax credits is due to the extra disability elements, Housing Benefit includes a disabled child premium (and severely disabled child premium if highest rate of care of DLA) in the calculation, which cancels out the extra Child Tax Credit elements. This means that your Housing Benefit award should not change.

It’s important to tell Housing Benefit about your DLA award

Housing Benefit will only do this if they know about the award of DLA for your child. The Tax Credit Office automatically tells Housing Benefit when there is any increase to your Tax Credit award, but don’t tell them it’s because of a DLA award.

If I get a backdated payment of Child Tax Credit, will this affect my other benefits?

If you get a lump sum payment for arrears of Child Tax Credit, this is ignored by Housing Benefit and other ‘means-tested’ benefits for 52 weeks. It will have no effect on your Housing Benefit or other benefits if, when added to any other savings or capital you may have, your total savings are £6,000 or less.

More advice on benefits

If you would like more individual advice on Housing Benefit or the capital limits for ‘means-tested’ benefits, our specialist welfare rights team can help. Please call our freephone helpline on 0808 808 3555 for a telephone call back appointment.

You can also read our benefits and tax credits webpages.