How we calculate Housing Benefit and Council Tax Reduction

What is considered when you make a claim for Housing Benefit or Council Tax Reduction.

How we work out your income

To work out your total income we add together any earnings from you or your partner have, any other unearned income you have coming in together with income from your savings.

Earnings include your take home pay or if you are self-employed your business profits after any allowable expenses are taken off.

We count the money that you and your partner earn from work after you take money out. This is for Tax, National Insurance and half of any money paid into a pension fund. To this figure we add any other income that you might have, for example, state retirement pension, a pension from a former employer, tax credits, or other state benefits.

We disregard some types of income and do not take them into account:

  • Disability Living Allowance
  • Personal Independence Payments
  • Attendance Allowance, and
  • Child Benefit

Even though we do not consider these incomes, it is still important that you tell us about them.

We may also calculate a 'Tariff Income' from any capital or savings that you or your partner have. We add this to the figures. 

What you will need to provide with your application

Find out what documentation you need to support your claim

Disregarded earnings

Some of your earnings are not included in the calculation for Housing Benefits.

If you:

  • are a single person - you will be deducted £5 per week
  • are a couple - you will be deducted £10 per week
  • are a single parent - you will be deducted £25 per week
  • have a certain disability, are a carer or in a certain specialist group - you will be deducted £20 per week
  • are, in some circumstances, working at least 16 hours a week - you will be deducted £17.10 per week

Childcare costs

Childcare costs can be disregarded in some circumstances, in addition to the standard earnings disregards and additional earnings disregard.

Up to £175 for one child.

Up to £300 for two or more children.

Unearned income

Unearned income is money you receive which is not from employment.

This includes retirement pension, occupational pension (less tax) and all Social Security Benefits.

Some benefits and payments are not included as income in the assessment of your entitlement. You must still notify us if you have any of these payments as they can affect your claim in other ways.

100% of payments that are disregarded per week:

  • War Pensions, War Widow's Pensions, Armed Forces Compensation Scheme Payments
  • Disability Living Allowance, Personal Independence Payments, Attendance Allowance
  • Child Benefit
  • maintenance payments for a child

£15 is disregarded per week for:

  • Widowed Parent's Allowance and Widow Mother's Allowance
  • maintenance payments for an adult