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Your earnings and your partner’s earnings are taken into account in the benefit assessment. Your net weekly earnings are taken into account – ie, after deducting:

• income tax;
• class 1 national insurance contributions;
• half of any contribution you make towards a personal or occupational pension.

Some of your earnings are disregarded. Of the following, the highest disregard(s) that applies in your circumstances is deducted from your earnings:

• £25 for lone parents;
• £20 for those who get a disability premium;
• £20 for those who get a work-related activity or support component in their applicable amount. For those doing permitted work (work that is allowed for those getting new-style ESA) and getting certain other benefits, the disregard can be higher;
• £20 for those who get a carer premium;
• £20 for part-time firefighters and some other emergency auxiliaries;
• £10 for couples, whether one or both are working;
• £5 for single people.

For example, if you are a lone parent, you have £25 a week disregarded.

In some cases, childcare costs for registered childminders, nurseries and playschemes can be disregarded from earnings. Childcare costs of up to £175 a week for one child or £300 for two or more children are deducted from weekly earnings if you are:

• a lone parent who is working; or
• in a couple and both of you are working; or
• in a couple, one of you is working and one of you is disabled (eg, gets a disability premium) or is in hospital or prison.

In each case, the work must be for 16 hours or more a week.

An extra £17.10 is disregarded if you work 16 hours or more and have a child or a disability or work 30 hours or more and are aged 25 or over (and in some other cases). From October 2026 additional amounts are disregarded from earnings.1

For full details of the way earnings are treated, see CPAG’s Welfare Benefits Handbook.

Some benefits are taken into account in the assessment of housing benefit (HB). Other benefits are ignored or partially ignored.

Benefits taken into account in full include:

• carer support payment;
• new-style jobseeker’s allowance;
• new-style employment and support allowance (ESA);
• incapacity benefit;
• most industrial injuries benefits;
• retirement pension.

Benefits completely disregarded include:

• adult disability payment;
• bereavement support payment;
• Best Start grant;
• Scottish carer supplement;
• carer additional person payment;
• young carer grant;1
• child benefit;
• child disability payment;
• pension age disability payment;
• funeral support payment;
• Scottish adult disability living allowance;
• Scottish child payment.

Benefits partly disregarded include widowed parent’s allowance – £15 a week is disregarded. You do not get this disregard in full if you already have £10 disregarded from a student loan or £20 disregarded from discretionary fund payments.

Child maintenance payments are disregarded in full.

There are limits on the amount of savings and other capital you can have and still claim benefit. These limits are described below. Some kinds of capital are not counted in the assessment. For details, see CPAG’s Welfare Benefits Handbook.

You cannot get housing benefit (HB) if your savings or other capital are above £16,000.

If your capital is £6,000 or less, it does not affect your benefit at all.

If your capital is between £6,000.01 and £16,000, you are treated as though you have income from this capital of £1 a week for every £250 or part of £250 between these limits. This is referred to as ‘tariff income’. For example, if you have savings of £6,525, your tariff income is £3 a week.

These limits are different if you or your partner are over pension age. All your capital is ignored if you or your partner get pension credit guarantee credit. Otherwise, tariff income of £1 for each £500 or part of £500 between £10,000.01 and £16,000 is taken into account in the assessment of HB.

This chapter explains how your income is treated when working out your entitlement to health benefits under the NHS low income scheme (see here).

If you are not exempt from healthcare costs (see Chapter 5) and have less than £16,000 a year in property, savings or other assessed income or capital, you are eligible to apply for at least some assistance.

• The NHS low income scheme helps with health costs if your income is low enough.
• Student loans for maintenance and most grants count as income.
• Other income, such as earnings and some benefits, is taken into account in the assessment.

If you are a full-time student, you cannot claim universal credit (UC) while you are looking after someone who is ill or disabled. You may be able to claim carer support payment (CSP – see here).

Part-time students can claim UC and, usually, CSP (see here).

If you are a full-time student, you may have to stop your course while you are caring. If you have to wait to return to it once your caring responsibilities have ended, you can claim UC. You can claim for up to a year until the day from when your institution agrees you can return to your course. You are not eligible if you get a grant or loan during this time. You can also claim new-style jobseeker’s allowance if you meet the contribution conditions.

Students aged 16–19 can apply for a young carer grant (see here).

If you are a full-time student taking time out to re-sit exams, you are still treated as a student during your absence from the course. You cannot claim universal credit (UC) during this time, unless you would be eligible anyway as a student – eg, as a parent. However, if you are taking professional qualifications set by a professional institute or some other body unconnected to your own college or university, you may be able to claim UC while taking time out for re-sits. You may need to appeal and argue that caselaw supports your getting benefit.1

If your university allows you to ‘register with attendance’, you may be able to get a student loan and grant for living costs from Student Awards Agency Scotland (SAAS) during a re-sit year. Registering with attendance means you are registered as a full-time student, but you attend your course on a part-time basis for a year. SAAS does not pay your tuition fees or give you a bursary. If you are eligible for benefit, you may be better off being in ‘academic suspension’ for the year: you cannot get a loan, but you can claim UC (if you are a student who can get UC).

Check whether you can get help from the Carnegie Education Fund for tuition fees if SAAS is not paying them (see here).

Note: you also continue to count as a full-time student if you are on a modular course and are doing re-sits or completing a module after the official end date of your course.2

If you take time out of your course for another reason, you usually still count as a full-time student, with no additional entitlement to benefits during your time out. However, if you are on a modular course and take a full year (or more) out of the course, you may no longer count as a student and may therefore be able to claim universal credit under the normal (non-student) rules.1

The following books are available from CPAG, 30 Micawber Street, London N1 7TB, Tel: 020 7837 7979. You can also order online, and find details of CPAG’s other handbooks and online subscription services, and details of the prices for members at cpag.org.uk/shop.

Welfare Benefits Handbook (published annually in April)

Digital+ (CPAG’s full digital package which includes the full text of the Welfare Benefits Handbook online and updated throughout the year, the Benefits for Migrants Handbook, the Welfare Rights Bulletin and decision-making tools and appeal letter generators): see cpag.org.uk/subscriptions for details.

Benefit Rates Poster

Universal Credit: what you need to know

Council Tax Handbook

Fuel Rights Handbook

Mental Health and Benefits Handbook

Children’s Handbook Scotland (free online at cpag.org.uk/welfare-rights)

Disability Rights Handbook (published by Disability Rights UK)

Debt Advice Handbook Scotland (free online at cpag.org.uk/welfare-rights)