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. It is for people aged between 16 and State Pension age.

Income Support helps cover basic living costs. It’s for people who don’t have to register as being unemployed if they’re out of work. This includes:

  • carers
  • single parents with a child under five
  • people who claimed on the basis of incapacity to work before 31 January 2011.

If you’re unemployed and looking for work, you can claim Jobseeker’s Allowance instead.

Important changes

Income Support is gradually being replaced by Universal Credit, for people making a new claim in England, Scotland and Wales. The benefit you have to apply for will depend on where you live. To find out how these changes may affect you, contact a welfare rights adviser.

Who can claim Income Support

You can claim Income Support if all of the following apply:

  • Your savings are worth £16,000 or less.
  • You have no income or a low income. If you have a partner, their income and savings will also be taken into account. If you are claiming on the basis of incapacity, earnings from some types of ‘permitted work’ are not taken into account.
  • You work less than 16 hours a week. And if you have a partner, they work less than 24 hours a week.

You can also claim if you are under 19 and:

  • a parent
  • not living with a parent (or someone acting as a parent)
  • you are a refugee learning English.

How much Income Support you’ll get

Income Support is paid at different rates depending on your situation. You may get:

basic payments (called personal allowances) – there are different basic payments you may get depending on your situation, for example:

  • your age
  • whether you’re single or have a partner
  • whether you’re a lone parent (if you’re under 25).
  • extra payments (premiums) for special circumstances, for example because you are disabled or a carer.

Income Support acts as a ‘passport’ to other benefits, such as free school meals, free prescriptions or Housing Benefit. It can also include some help with paying off the interest on mortgages or loans.

The amount of Income Support you get will not be reduced if you or your partner claim Personal Independence Payment, Disability Living Allowance or Attendance Allowance. In fact, you may become eligible for more.

How to claim Income Support

Income tax refund

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

If your circumstances have changed, it’s also worth checking whether you’re still paying the correct amount of tax.

How to claim

Your employer may be able to organise this. Or you can contact HMRC.

Working Tax Credit (Means-tested)

This benefit is for people aged from 16 to State Pension age who either:

  • work but have a low income
  • work and have a disability.

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.

Who can claim Working Tax Credit

To claim Working Tax Credit (WTC), you must:

  • work (either for an employer or self-employed) for a certain number of hours each week
  • have an income below a certain level, or have a disability that would place you at a disadvantage if you tried to get a new job.

If you are aged 16–24, you can only claim WTC if you have a child or a qualifying disability.

If you are off work due to illness, you may still be able to claim WTC for up to 28 weeks.

How much you’ll get

WTC includes a basic amount. There are also extra payments (elements) for people in certain situations. The extra elements include:;

  • a single parent element
  • a disability element
  • a childcare element.

Changes to WTC

If you are already getting WTC, you’ll continue to get it until either:

  • your circumstances change
  • the DWP decides to transfer your claim to Universal Credit.

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

How to claim Working Tax Credit

Call HMRC Tax Credits Helpline on 0345 300 3900 or textphone 0345 300 3909.

Back to Working age benefits

Jobseeker's Allowance

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

Universal Credit

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