Benefits in work

3 mins read

This advice applies across the UK.

Returning to work is likely to mean big changes to your family’s finances. It is important that you get advice as soon as possible about what benefits you might still get alongside your earnings.

In this article

Benefits that are not affected by work

Some benefits that you get will not be affected by a move into work. For example, any Disability Living Allowance, Child Disability Payment or Personal Independence Payment that is paid to your child can continue regardless of whether you start work or not.

Child Benefit also continues to be paid when you are working. However, if you or your partner earn more than £50,000 per year, your Child Benefit is reduced. This is done by way of a claw back through the income tax system. If you earn more than £60,000, all of your Child Benefit will be recovered through income tax.

Any Council Tax discount or Council Tax disability reduction continues while you are working.

Benefits that may be affected by a return to work

Many benefits are affected by earnings. For example, it is only possible to continue receiving Carer’s Allowance if the carer’s earnings are no more than £139 per week after certain deductions. Any earnings that the carer’s partner has are ignored.

Many benefits are means tested. This means that any earnings you or your partner have are likely to affect these benefits. Income Support will often stop once you start working, although it may continue at a reduced rate if your earnings are very low or if you still receive Income Support amounts for children as part of your claim.

Other benefits like Universal Credit, tax credits, Housing Benefit and Council Tax reductions are also affected by earnings. Depending on the amount of your earnings and your other circumstances these benefits may not necessarily stop. Often they can continue although the payments you receive may be lower. If your earnings are low some or all of these benefits may be unaffected.

If your earnings are above certain levels you may also find that you no longer automatically qualify for things like free school meals or help with NHS costs.

Working Tax Credit

Although Working Tax Credit is in the process of being replaced by Universal Credit, it is still possible for someone who already gets Child Tax Credit to qualify for Working Tax Credit payments for the first time.

If you are a lone parent and you start to work more than 16 hours, make sure you let the Tax Credit Office know.

If you are a couple on Child Tax Credit, you should start to become eligible for Working Tax Credit alongside your existing Child Tax Credit if you work 24 hours between you or if one partner works 16 hours and the other is entitled to Carer’s Allowance, incapacitated, in hospital or in prison.