Calculating HB/CTB
Income
Q. Is there a way of remembering the difference between what is counted as income for working age people, and for pensioners?
A. An easy way to remember is that for working age people, all income is included unless it is specifically disregarded in the regulations. For pension age people, all income is disregarded, unless it is specifically included in the regulations.
Q. Who can get the additional earnings disregard?
A. The additional earnings disregard applies where the claimant or their partner is aged 25 or over and works 30 hours or more.
It can also be applied where the claimant, or their partner, works 16 hours or more, is entitled to Working Tax Credit (or would be if they claimed) and is either:
- a lone parent
- a couple with children
- disabled
- aged 50 or over
In the last two categories, if the claimant has a partner, the member of the couple who is disabled or aged 50 or over must be working 16 hours or more.
Single claimants or a couple without children can also get the additional
disregard if they work 16 hours or more, are aged 50 or over and are entitled
to the 50 plus element of Working Tax Credit.
Q. Can a claimant still get the additional earnings disregard if they
are sick or on parental leave?
A. No. For the purpose of the additional earnings disregard the claimant or partner (whichever one gives rise to the disregard) is not considered to be in remunerative work during any periods of sickness, maternity leave, paternity leave or adoption leave.
Capital
Q: Why isn’t there a HB/CTB upper capital limit for people who get Guarantee Credit?
A: There is no upper capital limit for Guarantee Credit. And because Guarantee Credit is a passport benefit for HB/CTB, it would be unfair and confusing to have an upper capital limit for HB/CTB for people getting Guarantee Credit.
Q. Does money acquired from equity release count as capital?
A. Yes. Any income or capital from equity release is fully taken into account.
Second adult rebate
Q. If someone gets a council tax discount and second adult rebate, is the second adult rebate taken off after the discount?
A. No, second adult rebate is a fixed percentage of the gross council tax, before council tax discounts are applied.
Extended payments
Q. Can periods of time on IS, JSA, IB, SDA, ESA(C) and ESA(IR), be combined when calculating the 26 week period for extended payments?
A. The 26-week qualifying period can be made up or combinations of either IS/JSA/ESA(IR) or IB/SDA/ESA(C).
Childcare charges
Q. Why have Childcare Charges Disregard?
A. Childcare Charges Disregard offers extra financial help to those people who are on a low income, work over 16 hours and incur childcare costs. Provision for the Childcare Charges Disregard is made through Housing Benefit [HB], Council Tax Benefit [CTB] and Working Families' Tax Credit [WFTC].
For those people whose childcare costs are more than their earnings, reductions in Housing Benefit/Council Tax Benefit largely offset the gains through the Childcare Charges Disregard.
Q. Why do childcare providers have to be registered?
A. In HB/CTB and Working Families' Tax Credit, the register of approved child-minders is used to determine what childcare costs shall be deducted or allowable, as the case may be.
Q. Who is responsible for the registration of childcare providers?
A. Until recently, the registration of childcare providers was the responsibility of local authorities. Recent changes to the law in England, Wales and Scotland require matching changes to HB/CTB regulations.
England and Wales introduced changes to childcare registration (Care Standards Act, 2000). These changes made OFSTED the regulatory authority for childcare in England and the National Assembly for Wales the regulatory authority in Wales.
Scotland has introduced parallel changes through the Regulation of Care (Scotland) Act 2001 which establishes the Scottish Commission for the Regulation of Care as being the regulatory authority for childcare in Scotland.
Earnings and Earnings Disregards
Q. What counts as earnings?
A. Earnings (for employed earners) are defined in Housing Benefit Regulation 35 and include:
- bonus or commission;
- holiday pay (except any payable more than four weeks after termination of employment);
- compensation payments (payments made in respect of the termination of employment);
- retainers;
- expenses not wholly, exclusively and necessarily incurred in the performance of the duties of the employment (e.g. childcare costs and travelling expenses to work);
- certain employment rights payments;
- certain non-cash vouchers.
Q. Why are work-related expenses not deducted when calculating earnings?
A. People in full-time work normally have to meet their own employment expenses, such as fares to work. There is no allowance for such expenses generally, ensuring standard treatment and removing possible disincentives to take up full-time work. As a special measure there is a childcare disregard in Housing Benefit and Council Tax Benefit, to help those with childcare responsibilities to move into full-time work.
Q.Who gets what earnings disregard?
A. The standard disregard for single people is £5 a week.
The standard disregard for couples is £10 a week.
There is a higher disregard of £20 a week for *certain groups.
The standard disregard for lone parents is £25 a week.
Q. Who qualifies for the higher £20 earnings disregard?
A. People in certain groups, such as lone parents, carers and people with disabilities are eligible for the higher disregard. In addition, people in certain special occupations are also eligible for the higher disregard e.g. coastguards and firefighters in recognition of the services they provide and the potential hazards they face in undertaking these duties.
Q. Why have an earnings disregard?
A. The disregards are designed to achieve a balance between providing an encouragement to undertake part-time work and remain in touch with the labour market, without creating disincentives to full-time work and independence.
