Income based benefits

Also known as ‘means-tested’, these benefits are for people who are in lower paid work or are looking for a job. What you receive is determined by your situation. This page talks about the new main benefit, Universal Credit, and the benefits that will eventually be replaced by it. 

Universal Credit

Universal Credit is being gradually rolled out across Great Britain and will eventually replace the existing benefits listed below for people aged 16 to 64. It will be introduced from September 2017 in Northern Ireland.

Extra money is available for people with a health condition, childcare costs or caring responsibilities. This means that parents supporting their child can apply, as well as young people aged 18 or over.

Look at our Universal Credit factsheet.

Note: You could still apply for the benefits below, but you won't be able to claim them and Universal Credit at the same time.

Other benefits

Child Tax Credit and Working Tax Credit

Tax credits are income-based state benefits that provide extra money to anyone responsible for children.

If you have a child under 16 (or under 20 and in approved education or training) you could claim Child Tax Credit. You'll get a basic amount per year, plus extra on top of this for each disabled or severely disabled child. If your child is awarded the highest rate care component of DLA, you will be entitled to the severe disability element of Child Tax Credit. 

Child Tax Credit is now limited to two children for children born from April 2017. People starting a family after April 2017 will also no longer be eligible for the Family Element in tax credits. The equivalent in Universal Credit, known as the first child premium, has also been scrapped.

If you or your partner have to reduce your working hours you may be entitled able to get Working Tax Credit, or may be entitled to more if you already receive it. 

You can make a claim if you don’t live in a Universal Credit area. Otherwise, you’ll need to apply for Universal Credit instead.

To claim tax credits, call the Tax Credit Helpline on 0345 300 3900 and ask them for an application form or find out more on

It’s important to report any changes to your circumstances to the Tax Credit Office within 30 days or you risk being fined. Check which changes you must report. 

Employment Support Allowance (ESA)

ESA helps people over the age of 16 whose health condition - including stress and anxiety - or disability affects their ability to work. There are two components of ESA, one of which is income related. Your child may be entitled to one or both depending on your circumstances.

Look at our ESA factsheet.

Housing Benefit

If you are struggling to pay rent, and you're on a low income, you may be entitled to Housing Benefit. It can’t be paid for heating, hot water, energy or food, but you can look at our Managing money section for advice about how to save costs.

If you rent a room or a property from a private landlord, Local Housing Allowance (LHA) is used to work out how much Housing Benefit you will get. The amount you receive will depend on your circumstances.

Housing Benefit can’t be backdated more than four weeks so it’s worth applying sooner rather than later. 

Council Tax Reduction

If you live in Great Britain and are on a low income or not working at all, then you may be able to receive Council Tax Reduction. This could be up to 100 per cent of your bill.

In Northern Ireland, people on low incomes can apply for a reduction in their rates through the Rates Housing Benefit and Rate Relief schemes.

Income Support 

Income Support helps to cover basic living costs. You’ll need to meet the set criteria, such as working less than 16 hours a week. 

You’ll get a basic payment, usually paid every two weeks, and could also receive an extra payment or ‘premium’ if you’re a carer. Exactly how much will depend on your circumstances but if you qualify, it should be at least £57.90 per week.

Lone parents can only get Income Support if their youngest child is under five. If your child is older and you don't work, you may need to claim Jobseeker's Allowance (JSA) instead.

Limits to what you can receive

There is a limit to the total amount you can receive from certain benefits. This is called the benefit cap. 

This means there will be a limit on the total amount of certain benefits you can get. This does not affect families with a child that receives DLA or PIP. 

If your home is considered too big for you then you may have your benefits cut or stopped altogether. This is commonly known as ‘bedroom tax’. However, there are special circumstances where this will not affect you. For example, if you have a disabled or sick child and need a spare room because they cannot share a room or need a carer to stay overnight. 

Where next? 

Updated July 2017, next review due 2018.