Managing on a low income

There are several ways in which the government may offer financial help if you are on a low income:

  • Income support helps people on a low income between 16 and the State Pension age. It covers basic living costs. Your savings must be less than £16,000 to claim Income Support. Your age, the number of hours you work and your household costs will be taken into account.
  • Income tax refund may be applicable for you if your income falls or you have to give up work.
  • Working tax credit is a top up payment for people on a low income. It is means-tested and you must be over 16 to claim it.

Working Tax Credit and Income support are being replaced by Universal Credit.

You can contact one of our welfare rights advisers for more information. Call them for free on 0808 808 00 00.

Income Support (means-tested/non-contribution-based)

This is a means-tested benefit for people on a low income, aged between 16 and the age at which they can claim Pension Credit. It’s intended to cover basic living costs. Income Support is for people who don’t have to register as being unemployed if they’re out of work, such as carers and single parents with a child under five. If you’re unemployed and looking for work, you can claim Jobseeker’s Allowance instead.

If your partner works for more than 24 hours a week this may affect your eligibility for income-based support.

You can claim Income Support if your savings are worth £16,000 or less. The value of your home is usually ignored. Normally, you can’t get Income Support if you work 16 or more hours a week, or if your partner works more than 24 hours a week. Some of your earnings from work are disregarded for this benefit. This is typically £5, £10 or £20 of your weekly earnings depending on your circumstances.

If you receive Income Support, the amount won’t be reduced if you or your partner claim Disability Living Allowance, Personal Independence Payment or Attendance Allowance – in fact, you may become eligible for more.

Important changes

This benefit is gradually being replaced by Universal Credit for people making a new claim. The benefit you have to apply for will depend on where you live. Contact a welfare rights adviser to find out how this change may affect you.

Many factors will be taken into account when you claim Income Support. They include:

  • your age
  • your income
  • your housing costs
  • your savings and investments
  • the number of hours you work a week
  • your personal circumstances, such as being a carer or single parent.

Income Support is made up of the following:

Personal allowances

These are payments for living expenses for you and your partner. If you’re eligible and have dependent children, you should claim Child Tax Credit (or, depending on where you live and your situation, Universal Credit) as well.

Premiums

This is an extra amount that’s paid because of special circumstances, for example, being a carer or having a disability.

Housing costs

Income Support can help with mortgage interest payments. Income Support also acts as a ‘passport’ to other benefits, such as free school meals, free prescriptions or Housing Benefit.

How can I claim?

Call Jobcentre Plus on 0800 055 6688, textphone 0800 023 4888, or visit gov.uk/income-support.


Income tax refund

If you have to give up work and your income falls, you may be eligible for a tax refund.

How can I claim?

Your employer may be able to organise this, or contact your local HMRC Enquiry Centre. If your circumstances have changed, it’s also worth asking whether you’re still paying the correct amount of tax.


Working Tax Credit (MT)

This is a payment made to top up the earnings of people who are working but are on a low income. It can be claimed by single people, couples, parents and people without children. It’s also paid to working people with a physical or mental disability that puts them at a disadvantage when getting a job. Working Tax Credit is means-tested and you must be aged 16 or over when you make a claim.

Working Tax Credit is made up of different elements to suit people’s different circumstances. These include a single parent element, a disability element and a childcare element.

You may still be able to claim Working Tax Credit for up to 28 weeks if you’re off work due to illness. See also Child Tax Credit and Universal Credit.

Important changes

Working Tax Credit is gradually being replaced by Universal Credit for people making a new claim. The benefit you have to apply for will depend on where you live. If you’re already getting Working Tax Credit, you’ll continue to do so, either until your circumstances change or until the DWP decides to transfer your claim to Universal Credit.

If you or your partner still get Working Tax Credit, you’ll be exempt from the benefit cap even if you’re entitled to Working Tax Credit but do not receive a payment from HMRC for some reason (awarded a ‘nil entitlement’). So it’s worth finding out whether you qualify. Any money you get from Universal Credit may be affected by the benefit cap. Contact a welfare rights adviser for more information.

How can I claim?

Call the HMRC Tax Credits Helpline on 0345 300 3900 or textphone 0345 300 3909. You can also get an application pack from your local HMRC Enquiry Centre. For more information, visit hmrc.gov.uk/taxcredits


Back to Working age benefits

If your illness affects your ability to work

You may be able to get financial help from the government if you are unable to work because of cancer.

Universal Credit

Universal Credit is a payment for people who are on a low income or looking for work in England, Scotland and Wales.

Jobseeker's Allowance

Jobseeker’s Allowance can give you a weekly income if you are unemployed and able to work.

Industrial injuries disablement benefit

You can claim Industrial Injuries Disablement Benefit if you’re ill or disabled due to your work.