Advisers

RR2 - A guide to Housing Benefit and Council Tax Benefit

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Working it out

Income and capital

The assessment of your HB/CTB entitlement takes into account any resources you may have. These resources can be split into income and capital. For customers receiving the Savings Credit of Pension Credit, The Pension Service will supply the council with a statement of income and capital. This will be called the Assessed Income Figure (AIF) and the council will use this figure when calculating entitlement to HB/CTB.

Income is all the money that you have coming in from earnings, social security benefits, maintenance payments and other sources. Depending on the type of income, it may be completely or partially ignored in the calculation of your HB/CTB (the disregards), or taken fully into account.

Capital means your savings, investments and the value of property and land owned but not occupied by you.

For the purposes of HB/CTB, certain important types of capital are ignored, such as personal possessions and your home. You will not get HB/CTB if your capital is worth more than £16,000 unless you are entitled to Guarantee Credit of Pension Credit.

Your family’s resources

Normally, your resources and those of your partner are taken together when your income and capital are worked out. (There are some exceptions which are explained where they apply.) [HB Reg 19, CTB Reg 11, HB(SPC) 19; CTB SPC) reg 13]

Other people’s resources

If someone lives with you who is classed a non-dependant, your council may want to take their resources into account. This will only happen if the council believes that: [HB Reg 20, CTB Reg 12]

In this case the council will not count the resources you actually have, but will count the non-dependant’s resources as if they were yours, and work out your benefit on that basis.

If you are getting Pension Credit, Income Support or income-based Jobseeker’s Allowance, then the council will not apply this provision.

Income from employment

This explains what counts as your income from work you do when you are employed by someone else. If you are a company director or any other officeholder in a company you are classed as an employee of that company. Further information explains about self-employed earnings. [HB Reg 35 (1), HB(SPC) 35(1); CTB Reg 25(1) CTB(SPC) Reg 25(1)]

Earnings from employment means any money you are paid when you work for someone else. This includes the following types of payments:

Earnings from employment do not include: [HB 35(2), HB(SPC) 35(2); CTB Reg 25(2) CTB(SPC) Reg 25(2)]

Occupational pensions are counted as other income.

Information needed [HB 36(3) HB(SPC) 36(2); CTB 26(3) CTB(SPC) 26(2)]

When the local council assesses your earnings it will need details of:

Average earnings [HB 29(1) HB(SPC) 33(1); CTB 19(1) CTB(SPC) 23(1)]

Most people’s earnings change from time to time. When your weekly income is calculated, an average amount may be worked out. If you are paid weekly this average will normally be taken over the five weeks before your claim. If you are paid monthly the average will normally be taken over the two months before your claim.

It will help if you can provide pay slips for the council to work out your average earnings. If you can supply any other evidence of your earnings (for example, a contract of employment letter or pay statement) this will be helpful. Your local council may approach your employer for information about your earnings.

Variable earnings [HB 29(3) HB(SPC) 33(2); CTB 19(3) CTB(SPC) 23(2)]

In some cases the assessment of your earnings may be made in a different way. These are cases where:

In these cases the council may have to estimate your likely average weekly earnings over the assessment period.

Starting work [HB 29(2) HB(SPC) 33(2);CTB 19(2) CTB(SPC) 23(2)]

If you have just started work, your income cannot be worked out by taking a five-week or two-month average. In this case your council may take your first pay slip as your average income, or they may ask your employer to give an estimate of your likely weekly earnings.

Net earnings [HB 36(3), CTB 26(3)]

Once your gross earnings have been worked out, your council will take away:

This gives your net earnings, which are used to work out your HB/CTB.

Self-employed earnings

If you are self-employed, all the money you earn when you are not employed by someone else is known as your earnings from self-employment. You may have self-employed earnings even if you are also working for someone else, or if you are a franchise holder. [HB 30 & 37 HB(SPC) 37 & 38;CTB 20 & 27, CTB(SPC) 27 & 28]

Earnings from self-employment do not include any payments in respect of a child accommodated with you by arrangement with a local authority or voluntary organisation.

When working out your earnings your local council will want to know how much you earn when you are self-employed, and you will be asked to provide evidence, if possible, of how much you earn. If you are not sure how much you earn, or there is some other reason for uncertainty, the council may ask to see any correspondence you have had with the local income tax office, or about your National Insurance (NI) records. If you keep accounts, you should produce these as evidence of gross earnings. The council will use these to estimate your likely income over the forthcoming benefit period.

There are three stages in working out your self-employed earnings. The first is calculating the gross profit of your business. In the second stage, deductions – which are called allowable expenses – are taken away from the gross profit to give the net profit of the business. In the third stage, tax, NI, and pension payments are taken away from your net profit to give your net earnings.

Calculating profit [HB 38 & 39, HB(SPC) 39 & 40; CTB 28 & 29 CTB(SPC) 29 & 30]

The first stage in working out your earnings from self-employment is to calculate the gross profit of your business. If you have more than one business, the profit from each will be calculated and taken into account separately. If you are in partnership, then only your share of the profits will be taken into account.

In working out the total gross profit of your business the council will not make any deductions for the following amounts in your business records or accounts:

Any losses you have during the assessment period will count as nil income. This means that your earnings are not compensated by losses you have made.

Net profit

The next stage in working out your self-employed earnings is to make the following deductions (if they apply) from your gross profit to give the net profit for the business:

The net profit is then used as the basis for working out your net earnings from that business.

Net earnings

The council takes away the following from the net profit to give your net earnings from the business: [HB 38(1)(a) HB(SPC) 39(1)(a); CTB 28(1)(a) CTB(SPC) 29(1)(a)]

After these deductions are made, what is left is your net earnings for this business. Your average weekly earnings are then worked out, and at this stage any earnings disregards may be applied.

Information needed

It is up to you to make sure that the council has all the information it needs to work out your earnings for HB/CTB. If your accounts are unlikely to give enough information for the council to work out your earnings, you should keep a note of all your receipts and payments. If you do not have proper records of your business, your council will have to make its own estimate of what your earnings may have been.

Variable earnings

If last year’s trading account does not accurately represent your earnings, the council may use a shorter period (for example the last three months) to work out your earnings.

Starting up

In some situations, like when you are setting up a business, you may not have any accounts that the council can use to work out your average weekly earnings. In this case, the council will estimate your likely level of earnings rather than leave you without HB/CTB.

Childminders

If you are a childminder only one third of your earnings from childminding will be taken into account when your council works out your HB/CTB. There may then be a further amount of your income ignored if it qualifies for any earnings disregards – see below. [HB 38(9) HB(SPC) 39(8); CTB 28(9) CTB(SPC) 29(8)]

Earnings and earnings disregards

After working out your net earnings, any amount that is not counted in the calculation of your HB/CTB is known as a disregard. [HB Sch 4 HB(SPC) Sch 4;CTB Sch 3 CTB(SPC) Sch 2]

Some disregards apply only to unearned income and capital – these are listed and explained. Listed here are the main disregards that apply to earnings, whether you are employed or self-employed (for childminding see above).

The amount of your earnings that is not counted depends on which premium is included in your applicable amount. There is more information on the applicable amount and premiums.

When £5 is not counted

If you are single and you cannot get a greater disregard by any of the means explained below, up to £5 of your weekly earnings will not be counted (the £5 disregard).

When £10 is not counted

If you have a partner and you cannot get the £15 disregard by any of the means explained below, up to £10 of your joint weekly earnings will not be counted (the £10 disregard).

When £20 is not counted

£20 per week of your earnings will not be counted if your applicable amount includes:

If the disability premium has been changed to the higher or enhanced pensioner premium because of your age, you may get the £20 disregard in some circumstances.

If both you and your partner are carers, the total disregard cannot be more than £20. The carer premium and this earnings disregard can continue for a further eight weeks after caring ceases.

If you have a partner, your earnings are added together when your HB/CTB is worked out. In this case, the £20 of your weekly income that is not counted (the disregard) is taken from your joint income. However, in the case of the carer premium only up to £10 of the ‘non-carers’ earnings may be disregarded provided that the overall disregard does not exceed £20. If you cannot get the £20 disregard under the above categories, you may still be able to get it if you are:

You may be able to get this special disregard if you, or in the case of a couple, you or your partner are doing any of these jobs. If you and your partner are both doing any of the above jobs, your joint income will have a maximum £20 disregard. If you are doing any of these jobs but your partner is not, up to £10 of your partner’s weekly earnings can be used to make up your £20 disregard. The maximum disregard of your joint income is still £20 per week.

For example, if you earn £20 a week as a part-time firefighter and your partner earns £10 cleaning, £20 of your income is not counted but all of your partner’s is. Or, if you earn £15 a week as a part-time firefighter and your partner earns £10 cleaning, £15 of your income is not counted and £5 of your partner’s to make up the £20 maximum disregard.

When £25 is not counted

If you are bringing up children on your own up to £25 of your earnings will not be counted as income.

Additional disregard

If you work on average 30 hours a week or more you will usually be able to get an extra earnings disregard. In certain circumstances you can also qualify for the higher earnings disregard if you work 16 hours or more e.g if you are a lone parent or disabled. This is the same amount as the 30-hour tax credit in your Working Tax Credit (WTC) and is presently £14.50. If you qualify, the disregard will be applied to your earnings in addition to those on the previous page.

You will not be able to get the additional disregard if you qualify for it but do not earn enough to benefit from it. If this is the case your WTC can be disregarded, instead, up to the amount of the 30-hour tax credit included in what you receive.

Childcare charges

In certain circumstances, average childcare charges of up to £175 (for one child) or up to £300 for 2 or more children per week per family can be offset against your earnings. This disregard, which is in addition to the other earnings disregards, is available to:

It applies where formal childcare is provided by, for example, registered childminders or day nurseries for children until the first Monday in September following their 15th birthday (or the 16th birthday for children who are entitled to Disability Living Allowance or who are registered blind).

If your earnings are too low to cover the allowable child care charges to be offset against your earnings, then allowable child care charges can be offset against Working Tax Credit (WTC).

In certain circumstances, help with childcare costs can be given while you are on maternity leave or paternity or adoption leave or you are sick. Your local authority will be able to give you more details.

In some other cases explained here, different amounts of your earnings are not counted.

Pension Credit (Guarantee), Income Support or income-based Jobseeker’s Allowance [HB Sch 4.12, CTB Sch 3.12]

If you are getting the Guarantee Credit of Pension Credit, Income Support or income-based JSA then any earnings you get will not be counted again in working out HB/CTB.

Retirement [HB Sch 4.1(a)(i), CTB Sch 3.1(a)(i)]

If you retire from work on or after retirement age (60 for women and 65 for men) any final earnings from the work you have left will not be counted for the period beginning on the day after you retired.

Stopping work before retirement [ HB Sch 4.1(a)(ii), CTB Sch 3.1(a)(ii)]

If you stop working before retirement, some final earnings and expenses may not be counted.

Stopping part-time work [HB Sch 4.2, CTB Sch 3.2]

If you stopped part-time work (that is, less than 16 hours a week) before the day you claimed HB/CTB, any money you were given on stopping work will not be counted. (It will be counted if the money you receive is a retainer before you start working again or if you receive any Statutory Sick Pay, Statutory Maternity Pay, employer’s sick pay or employer’s maternity pay while you are off work.)

Earnings overseas [ HB Sch 4.13, CTB Sch 3.13]

If you have earnings overseas that you are not allowed to bring into this country then that money will not be counted for as long as it is held back there.

Changes in tax and National Insurance [HB 34, HB(SPC)34; CTB 24, CTB(SPC) 24]

Your local council may ignore the effects on your earnings of the government’s changes in tax or National Insurance rates, for up to 30 weeks. This is because the changes may not be reflected at once in your pay. During this time the changes are actually ignored in the assessment of your earnings – so there will be no backdated changes in your HB/CTB.

Notional earnings [HB 42(9) & (12), CTB 32(9) & (12)]

If, when working out your income, the local council thinks that you may have more earnings than you say you have, it may estimate the value of earnings you could get. These estimated earnings are called notional earnings. The council will not investigate every claim it receives, but it may do so if your income seems to be very low compared with similar work.

If you have done some work and you seem to have been paid very little for it, then the council will estimate what that work is worth. If you have a good reason for the pay being so low – for example, if you worked for someone who had very little money – then you should let the council know. If necessary, the council may check your statement of earnings by asking your employer.

Other income

Other income is all the other money you have coming in apart from earnings from employment or self-employment. It is sometimes called unearned income. [HB 40 Sch 5, HB(SPC) 27,28 & 29 Sch 5; CTB 30 Sch 4, CTB (SPC) 17,18 & 19 Sch 3]

In some cases none of your unearned income is counted. Sometimes part of it is counted, in other cases it is all counted.

Any income paid to a third party in respect of you or a member of your family will be treated as your income if the money is used for any of the following:

Any amounts which are not for these maintenance items will not be counted as your income (for example, money for a child’s education).

Any money you or a member of your family get on behalf of someone outside your family will be treated as your income if you keep or use that money or if it is used by or on behalf of any member of the family.

State benefits

The following benefits are counted in full as income for HB/CTB:

For dependency increases of benefits for an adult or child from whom you live apart.

Department for Education and Skills Training Schemes [HB Sch 5.13, CTB Sch 4.14]

If you are on Youth Training or Adult Employment Training and are paid a training allowance, the money you get is normally counted as unearned income and some of that income may be disregarded. However, if you are paid a wage by the company employing you your wage will be taken into account as earnings subject to the normal earnings disregard.

Business Start-up Schemes

If you are self-employed, any regular income that you get from a Business Start-up Scheme is taken into account when working out your earnings (see Starting up). [HB Sch 5, CTB Sch 4]

Unearned income that is not counted

The following types of income are not counted by your local council when it works out your HB/CTB:

Some types of income may be counted as capital.

Unearned income that is counted in part

The following are the types of unearned income that are only partly counted.

£20 or £10 of unearned income not counted

When your income is worked out, the local council will not count the first £20 per week of: [HB Sch 5.15, HB(SPC) Sch 5.1; CTB Sch 4.16,CTB(SPC) Sch 3.1]

£20 a week is the maximum amount that may be ignored of the total you get from these sources. Local councils may, from their own resources, disregard more of a war pension. If you are a student getting covenanted income in addition to any of the sources of money listed here, then only £20 of your total income may be ignored.

Dependency increases

Any adult or child dependency increase of a social security benefit or war pension payable to you in respect of an adult or child from whom you live apart, and to whom you pay at least an equal amount of maintenance (see other income).

Home income plans

Home income plans are schemes for raising income using your home as security to arrange a loan. This loan is invested (an annuity) and the return on the annuity repays the loan, and may provide additional income. In certain circumstances the net loan interest (mortgage interest) under this sort of scheme will not count as your income, but the remaining net income will be counted. [HB Sch 5.15, HB(SPC) Sch 5.1; CTB Sch 4.16,CTB(SPC) Sch 3.1]

Money from subtenants [HB Sch 5.22, HB(SPC) Sch 5.10;CTB Sch 4.22;CTB Sch 3.10]

If you are aged less than 60 and if you are renting part of your home to someone else, any money you get from your tenant will be counted as your income except for:

If you or your partner, if you have one, are aged 60 or over £20 a week will be disregarded.

Income from boarders [HB Sch 5.42, HB(SPC) Sch 5.9;CTB Sch 4.23, CTB(SPC) Sch 3.9]

The first £20

The balance is treated as income.

Adopting children [HB Sch 5.25, CTB Sch 4.26]

If you are getting money for adopting a child (including any custodianship allowance) part of that money will not be counted if it is more than the following amounts added together:

If the money you are given is more than these two amounts put together, the excess will not be counted. The rest will be taken fully into account.

Insurance in respect of loans and hire purchase (or similar agreements)

If you have taken out an insurance policy as protection against the risk of not being able to repay certain types of loan (including mortgage protection insurance which is a loan secured on your home), hire purchase and similar agreements, the money you get from this policy will not be counted. However, the money is only disregarded to the extent that it is used to (i) maintain the repayments and (ii) to pay any premiums on the insurance policy and, in the case of a loan secured on your home, an insurance policy taken out to insure against loss or damage to the building.

Capital treated as income [HB Reg 41;CTB Reg 31]

Capital you are paid in instalments will be treated as income if the money you have still to come, when added to other capital you already have, is more than £16,000.

Any money you get from a life or fixed-term annuity is treated as income, but any surrender value is ignored. [HB Reg 34(2), CTB Reg 25(2)]

Notional income [HB Reg 42, HB(SPC) Reg 41; CTB Reg 32, CTB(SPC) Reg 31]

Your local council may think that there is income which you could get but you are not claiming it. This is known as notional income because you do not actually receive that income. The council may estimate:

The sorts of notional income the council may be thinking of are:

There may be other sources of income that you could use. The council may take any notional income into account as part of the assessment of your available income. Your council will tell you if it thinks these sources of income may be available.

Parental contributions to students [HB Sch 5.19-20,HB(SPC) Sch 5.19-20; CTB Sch4.19-20, CTB(SPC) Sch 3.18-19]

If you are making a parental contribution to a student then part of your income is not counted to take account of this.

If your contribution has been worked out as part of the student’s grant then any amount you contribute will not be counted as your income. It will be calculated to cover the student’s period of study, which is usually the term time and the two smaller vacations in between, but not the long summer vacation. For more information on the period of study. [HB Sch 4.17, CTB Sch 4.17]

If the student is under 25 and does not get a state grant (or is getting a smaller discretionary award) and you are giving them money to live on, then your income will not include the smaller of either: [HB Sch 4.18, CTB Sch 4.18]

Receiving maintenance [HB Sch 5.47,HB(SPC) Sch 5.20; CTB Sch 4.48,CTB(SPC) Sch 3.20]

If you are entitled to the family premium, the first £15 a week of any money you get from an ex-partner or from the parent of a child or young person, provided that the child or young person is a member of your family, is disregarded. Maintenance payments which go direct to your child are treated as your income. This amount will be added to any other amounts of maintenance and the £15 disregard will apply in the same way. £15 is the maximum that can be disregarded in any week.

Otherwise, any money you get from an ex-partner should continue to be counted in full as income.

Cash in place of free coal

If you are aged less than 60 and given money in place of free coal, it is counted in full as income.

If you or your partner, if you have one, are aged 60 or over, cash in place of free coal is ignored.

Arrears of income

A lump sum of arrears of income will usually be treated as income over the period that they would have been treated as income if they had been paid on time. Arrears of some social security benefits are treated as capital and ignored for 52 weeks from the date they are received.

Capital

Your capital includes savings and investments held by yourself in any form (for example, bank and building society accounts, investment trusts, and shares) from any source (for example, inheritance, redundancy payments, and irregular payments from a charitable or voluntary source). It will normally also include the net sale value of land and housing that you do not occupy, after deducting 10% for expenses of sale. HB Reg 44, HB(SPC) 44; CTB Reg 34,CTB(SPC) Reg 34]

If you have a partner, capital belonging to your partner is treated as yours for the purposes of HB/CTB.

Capital outside the United Kingdom [HB 48, HB(SPC) 46; CTB 38, CTB(SPC) 36]

If you have capital – in the form of liquid or fixed assets – outside this country, your local council will need to know how soon it can be transferred and how much it is worth. If the capital cannot be brought into this country, enquiries will be made about how easily it can be sold, and whether a willing buyer can be found. If no willing buyer can be found, it may not be counted.

Pension Credit (Guarantee), Income Support and income-based Jobseeker’s Allowance [HB Sch 6.5; CTB Sch 5.5]

If you are getting the Guarantee Credit of Pension Credit, Income Support or income-based JSA, none of your capital will be counted because it has already been counted when your entitlement to Income Support or income-based JSA was assessed.

Pension Credit (Savings Credit)

If you are getting the Savings Credit of Pension Credit, The Pension Service will issue an Assessed Income Figure to your council which will include the treatment of your capital. Your council will use this figure when calculating your HB/CTB.

Social Fund [HB Sch 6.20, CTB Sch 5.20]

Any money you get from the Social Fund will not be counted as your capital or your income.

Capital for people aged under 60 [HB Reg 52, CTB Reg 42]

The first £6,000 of capital is not counted. Capital over £6,000 up to £16,000 will be taken into account at £1 a week for each £250 (or part of £250) of capital over £6,000 (see table for people aged under 60). Actual interest payments or dividends are not counted as income but as capital.

For example, if you have capital of over £6,000 but no more than £6,250 you would have an amount of £1 taken into account in the calculation of your HB/CTB. If you have capital over £6,250 but no more than £6,500 you would have £2 a week taken into account, and so on.

Capital for people aged 60 or over [HB (SPC) 29; CTB(SPC) 19]

The first £6,000 of capital is not counted. Capital over £6,000 up to £16,000 will be taken into account at £1 a week for each £500 (or part of £500) of capital over £6,000 (see table for people aged 60 or over). Actual interest payments or dividends are not counted as income but as capital.

For example, if you have capital of over £6,000 but no more than £6,500 you would have an amount of £1 taken into account in the calculation of your HB/CTB. If you have capital over £6,500 but no more than £7,000 you would have £2 a week taken into account, and so on.

For customers who receive the Guarantee Credit of Pension Credit there is no upper limit on the capital you can have.

Capital allowance for people in residential homes

People in certain types of residential accommodation do not have the first £10,000 of capital counted for Housing Benefit purposes. For customers aged under 60 capital between £10,000 and £16,000 will be taken into account at the rate of £1 a week for each £250 (or part of £250) over the £10,000 level. For customers aged 60 or over who do not receive Pension Credit (Guarantee), capital between £10,000 and £16,000 will be taken into account at the rate of £1 a week for each £500 (or part of £500) over the £10,000 level.

If you have capital over £16,000, you may still be entitled to Second Adult Rebate, as your income and savings are not taken into account. However, the actual income received from the second adult’s capital will be taken into account.

Personal possessions [HB Reg 4, HB(SPC) 47; CTB 39, CTB(SPC) 37]

Personal possessions – for example, a car, furniture and fittings in your house, and family belongings – are usually not included in the calculation of capital. However, this may not be the case where the council has good reason to believe that something has been bought to reduce your capital in order to gain or increase entitlement to benefit. If the council decides that you deliberately got rid of capital just so that you can get HB/CTB, it may assume that you have notional capital to the value of the capital you disposed of.

If you own your home [HB Sch 6.1, HB(SPC) Sch 6.26; CTB Sch 5.1, CTB(SPC) Sch 4.26]

The value of your property (including the house, garage and outbuildings) is not counted unless any part of the property could reasonably be sold off separately. Loans raised on the property will be counted as capital (but you will not be expected to raise loans if you do not wish to).

Property you own but do not occupy [HB Sch 6, HB(SPC) Sch 6; CTB Sch 5, CTB(SPC) Sch 4]

The value of this property is counted as capital but you may be able to get HB/CTB even if the value of the property means that your savings are more than £16,000. This is because the value of the property may be ignored when your savings are worked out, in certain circumstances.

If the property is occupied by an elderly or disabled relative as their home, its value is not taken into account for as long as it is so occupied.

If you have recently acquired the property and you intend to occupy it as your home, its value may not be counted for 26 weeks, or for a longer period if reasonable, from the date you acquired it.

If you are trying to sell the property, its value may not be counted for the first 26 weeks after you start doing this. It may not be counted for longer than this if you are finding it difficult to sell the property.

If you are carrying out essential repairs or alterations so that you can live in the property, its value may not be counted for a period of 26 weeks from the date you first arranged for repairs to be carried out. It may not be counted for longer than this if you are finding it difficult to finish the work.

If you are taking legal action so that you can live in the property, its value may not be counted for the first 26 weeks after you start doing this. It may not be counted for longer than this if legal action is continuing and you cannot live in the property.

If you have left the property after the breakdown of a relationship, and it is occupied by your former partner, its value may not be counted for the first 26 weeks after you left. If the property is occupied by your former partner and they are a lone parent, the property will not be counted for as long as it continues to be so occupied.

 

For people aged under 60 or those aged 60 and over but who do not receive the guarantee credit of Pension Credit.
Capital held
£
Amount taken into account
£
Capital held
£
Amount taken into account
£
6,000.01 – 6,250.00
1
11,000.01 – 11.250.00
21
6,250.01 – 6,500.00
2
11,250.01 – 11,500.00
22
6,500.01 – 6,750.00
3
11,500.01 – 11,750.00
23
6,750.01 – 7,000.00
4
11,750.01 – 12,000.00
24
7,000.01 – 7,250.00
5
12,000.01 – 12,250.00
25
7,250.01 – 7,500.00
6
12,250.01 – 12,500.00
26
7,500.01 – 7,750.00
7
12,500.01 – 12,750.00
27
7,750.01 – 8,000.00
8
12,750.01 – 13,000.00
28
8,000.01 – 8,250.00
9
13,000.01 – 13,250.00
29
8,250.01 – 8,500.00
10
13,250.01 – 13,500.00
30
8,500.01 – 8,750.00
11
13,500.01 – 13,750.00
31
8,750.01 – 9,000.00
12
13,750.01 – 14,000.00
32
9,000.01 – 9,250.00
13
14,000.01 – 14,250.00
33
9,250.01 – 9,500.00
14
14,250.01 – 14,500.00
34
9,500.01 – 9,750.00
15
14,500.01 – 14,750.00
35
9,750.01 – 10,000.00
16
14,750.01 – 15,000.00
36
10,000.01 – 10,250.00
17
15,000.01 – 15,250.00
37
10,250.01 – 10,500.00
18
15,250.01 – 15,500.00
38
10,500.01 – 10,750.00
19
15,500.01 – 15,750.00
39
10,750.01 – 11,000.00
20
15,750.01 – 16,000.00
40

For people aged 60 and over receiving the guarantee credit of Pension Credit.
Capital held
£
Amount taken into account
£
Capital held
£
Amount taken into account
£
6,000.01 – 6,500.00
1
16,500.01 – 17,000.00
22
6,500.01 – 7,000.00
2
17,000.01 – 17,500.00
23
7,000.01 – 7,500.00
3
17,500.01 – 18,000.00
24
7,500.01 – 8,000.00
4
18,000.01 – 18,500.00
25
8,000.01 – 8,500.00
5
18,500.01 – 19,000.00
26
8,500.01 – 9,000.00
6
19,000.01 – 19,500.00
27
9,000.01 – 9,500.00
7
19,500.01 – 20,000.00
28
9,500.01 – 10,000.00
8
20,000.01 – 20,500.00
29
10,000.01 – 10,500.00
9
20,500.01 – 21,000.00
30
10,500.01 – 11,000.00
10
21,000.01 – 21,500.00
31
11,000.01 – 11,500.00
11
21,500.01 – 22,000.00
32
11,500.01 – 12,000.00
12
22,000.01 – 22,500.00
33
12,000.01 – 12,500.00
13
22,500.01 – 23,000.00
34
12,500.01 – 13,000.00
14
23,000.01 – 23,500.00
35
13,000.01 – 13,500.00
15
23,500.01 – 24,000.00
36
13,500.01 – 14,000.00
16
24,000.01 – 24,500.00
37
14,000.01 – 14,500.00
17
24,500.01 – 25,000.00
38
14,500.01 – 15,000.00
18
25,000.01 – 25,500.00
39
15,000.01 – 15,500.00
19
25,500.01 – 26,000.00
40
15,500.01 – 16,000.00
20
26,000.01 – 26,500.00
41
16,000.01 – 16,500.00
21
26,500.01 – 27,000.00
42

Deposits on your accommodation [HB Sch 6.11, CTB Sch 5.11]

Sums that have to be deposited with a housing association as a condition of your tenancy are not counted.

Earmarked capital [HB Sch 6. 2-3, HB(SPC) Sch 6.1-3; CTB Sch 5.2-3, CTB(SPC) Sch 4.1-3]

If capital from the sale of a house is kept for a house purchase, it is not counted for up to six months, or longer if:

Compensation received for a burglary or for damage to or loss of a house is also not counted for six months, as long as it is to be used for repair or replacement. [HB Sch 6.10, HB(SPC) Sch 6.19; CTB Sch 5.10, CTB(SPC) Sch 4.19]

Valuation of property [HB 47, HB(SPC) 45: CTB 37, CTB(SPC) 35]

Property will be valued at the price it would be expected to fetch on the open market, less any outstanding mortgage or legal charges on the property. Ten per cent of the current market value will also be deducted to take into account the cost of the sale.

If you have property outside Great Britain and there is no restriction on transferring money to this country, your property will be valued at its local sale value. If there is a restriction, its notional value will be the value of a sale to someone in the UK. In both cases, any outstanding legal charges on the property or mortgages will be deducted, together with 10% of the total to cover the cost of the sale. [HB 48, HB(SPC) 46; CTB 38, CTB(SPC) 36]

Grants made under section 128 of the Housing Act 1988

Certain grants made available to extend existing property are not counted for up to 26 weeks or longer, if it is reasonable in the circumstances to enable time to obtain and occupy property or to complete necessary alterations.

National Savings Certificates [HB 47(b), HB(SPC) 45(b); CTB 37(b), CTB(SPC) 35(b)]

National Savings Certificates of the current issue are valued at purchase price. Certificates of a previous issue are valued as if they were purchased on the last day of that issue.

Life assurance policies [HB Sch 6.17, HB(SPC) Sch 6.11; CTB Sch5.17, CTB(SPC) Sch 4.11]

The surrender value of life assurance policies is not taken into account when assessing HB/CTB.

Arrears of benefits [HB Sch 6.9, HB(SPC) Sch 6.21; CTB Sch 5.9, CTB(SPC) Sch 4.21]

Any arrears of Disability Living Allowance, Attendance Allowance, Pension Credit, Income Support, income-based Jobseeker’s Allowance, Working Tax Credit and Child Tax Credit that you get are not counted for up to 12 months.

Lump sum payment of deferred State Pension [HB (SPC) Sch 6.26A, CTB Sch 4.26A]

The gross amount of lump sum, or an interim payment made on account of a final lump sum, paid at the end of the period of deferring State Pension will be disregarded as capital for the life of the recipient. NB: This change takes effect from 6 April 2006 onwards.

Compensation payments [HB Sch 6.14, 45 & 46, HB(SPC) Sch 6.17; CTB Sch 5. 14, 46 & 47, CTB(SPC) Sch 4.17]

For HB/CTB purposes, compensation payments will normally be counted in full as capital. Capital will not be counted if it is held in trust or by the ‘Court of Protection’ as a result of a personal injury payment – for example, a criminal injury payment or a vaccine damage payment.

People aged 60 or over

Compensation Payments made as a result of personal injury are ignored whether or not placed in a trust. [HB(SPC) Sch 6.17, CTB(SPC) Sch 4.17]

Blind homeworkers’ scheme [HB Sch 6.43; CTB Sch 5.43]

Any start-up payments made by a local authority under the blind homeworkers’ scheme to help with the costs of setting up a business from home do not count.

Business assets [HB Sch 6.8, HB(SPC) Sch 6.9 & 10; CTB Sch 5.8, CTB(SPC) Sch 4.9 & 10]

Business assets of a self-employed earner are not counted while engaged in that business. Nor are they counted in certain other circumstances, but any shares owned will be treated as capital.

Income that is treated as capital [HB Reg 46, CTB Reg 36]

The following types of income are treated by the local council as your capital:

Notional capital [HB Reg 49, HB(SPC) Reg 47; CTB Reg 39, CTB(SPC) Reg 37]

Your local council may think that there is capital which you could get but which you do not have. This is known as notional capital because you do not actually possess that capital.

Capital you have disposed of

You will be treated as having notional capital if you have disposed of capital in order to get HB/CTB or to get more HB/CTB.

Capital you could have got

If you have the right to money held in a private trust, then that is actually your capital, and will be taken fully into account.

The rules for notional capital do not apply in the following situations: [HB Reg 49(2), HB(SPC) Reg 47; CTB Reg 39(2), CTB(SPC) Reg 37]

Diminishing notional capital calculation [HB 50, HB(SPC) 48: CTB 40, CTB(SPC) 38]

If your council has decided to treat you as possessing notional capital they will reduce the amount of this capital on a regular basis by a set calculation. This calculation reduces your notional capital by the amount of benefit you have lost as a result of deprivation.

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