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Benefits for people in work

Universal Credit

Universal Credit (UC) will eventually replace Working Tax Credit.

UC is currently being rolled out to certain areas across the UK. Depending on where you live and what your personal circumstances are, you might be able to claim UC instead of Working Tax Credit.

To see if you live in a UC area, follow these steps:

Read more about UC.

Extra money for people in work

If you are working, you may still be able to get benefits or tax credits if you are on a low income. It does not matter whether you are working for someone else or self-employed. The benefits you can get depend on your circumstances, your earnings and other money you have coming in, and on how many hours you work each week. There are different benefits for people who work less than 16 hours a week and for people who work 16 hours or more.

Working out how many hours you work

If you have more than one job, you should add the hours from both jobs together. If the number of hours you work changes from week to week, your benefit will depend on your average hours. 

If you work less than 16 hours

If you work less than 16 hours a week, you may be able to claim Income Support or Jobseeker’s Allowance. However, if you have a partner who lives with you and works 24 hours a week or more, you will not be able to claim these benefits. Your partner may be able to claim Working Tax Credit instead. This applies whether your partner is lesbian, gay or heterosexual and whether you are married, in a civil partnership or just living together.

You could also be entitled to some Housing Benefit and Council Tax Reduction to help with the costs of rent and Council Tax. If you have children, you can claim Child Tax Credit and Child Benefit. You can get these benefits whether or not you do any work. You may also be able to get help such as free prescriptions, free school meals, help with the costs of a new baby or help with funeral costs, depending on the benefits or tax credits you get and your income.

If you work 16 hours or more a week

If you work 16 hours or more a week, you may be entitled to Working Tax Credit. This will depend on your circumstances and how much money you have coming in. You may also be entitled to other benefits, for example, if you are on a low income you could get some Housing Benefit and Council Tax Reduction to help with rent and Council Tax.

If you have children, you can claim Child Benefit and you may also be entitled to some Child Tax Credit. You do not have to be working to get Child Tax Credit, but your earnings will affect the amount you get. You may also be entitled to other help such as free prescriptions, help with the costs of a new baby or help with funeral costs.

Help when you start work

You may be able to get some help with the costs of starting work if you:

  • you start a new job
  • you increase your hours or wages
  • you go back to work after being sick or disabled.

Some kinds of help will depend on how long you have been unemployed, and some types of help are only for people on certain government schemes or training. If you want to find out what help you can get, you should ask at the Jobcentre.

Help with rent and Council Tax when you start work

When you start a new job, or increase your hours or wages, so that you come off certain out-of-work benefits, you may continue to get Housing Benefit and Council Tax Reduction paid at the same rate for the first four weeks of your new work arrangements. This extra benefit is known as ‘extended payments or extended reductions’.

To qualify you must have been getting one of the following for at least 26 weeks before the change in your working circumstances:

  • Income Support
  • income-based Jobseeker’s Allowance
  • income-related Employment and Support Allowance
  • Contributory Employment and Support Allowance
  • Severe Disablement Allowance
  • Incapacity Benefit

You can also get an extended payment if these benefits have stopped because your partner got a new job or increased their hours or wages.

You must tell your local authority about your new job or increase in hours or pay within four weeks of it starting. If you are on a low income and will still be entitled to some Housing Benefit or Council Tax Reduction in your new job, you can carry on getting the benefit.

For more information about Housing Benefit, see Help with your rent - Housing Benefit, and for more information about Council Tax Reduction, see Council tax Reduction – what you need to know.

Help with mortgage interest when you start work

If you are getting help with housing costs paid with your Income Support, income-based Jobseeker’s Allowance or income-related Employment and Support Allowance, you may be able to get this paid for the first four weeks that you are in work, or increase your hours. This is called the ‘mortgage interest run-on’.

You must have been getting Income Support, income-based Jobseeker’s Allowance or income-related Employment and Support Allowance for at least 26 weeks, and you (or your partner) must have taken up a job, or increased your hours, so that you are no longer entitled to these benefits.

You should let the benefits office or Jobcentre know that you are starting full-time work as soon as possible.

Get more help

If you need more help, speak to an adviser at your Local Citizens Advice.

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