5. Earnings
Your earnings and your partner’s earnings are taken into account in the benefit assessment. Your net weekly earnings are taken into account – ie, after deducting:
•income tax;
•class 1 national insurance contributions;
•half of any contribution you make towards a personal or occupational pension.
Some of your earnings are disregarded. Of the following, the highest disregard(s) that applies in your circumstances is deducted from your earnings:
•£25 for lone parents claiming housing benefit (HB);
•£20 for lone parents claiming income support (IS) or income-based jobseeker’s allowance;
•£20 for those who get a disability premium;
•£20 for those who get a work-related activity or support component in their HB applicable amount. For those on HB doing permitted work and getting certain other benefits, the disregard can be higher;
•£20 for income-related employment and support (ESA) claimants. This disregard can be higher for those doing permitted work;
•£20 for those who get a carer premium;
•£20 for part-time firefighters and some other emergency auxiliaries;
•£10 for couples, whether one or both are working;
•£5 for single people.
For example, if you are a lone parent who is also disabled, you have £25 disregarded for HB and £20 for IS.
In some cases, for HB, childcare costs for registered childminders, nurseries and playschemes can be disregarded from earnings. Childcare costs of up to £175 a week for one child or £300 for two or more children are deducted from weekly earnings if you are:
•a lone parent who is working;
•in a couple and both of you are working;
•in a couple, one of you is working and one of you is disabled (eg, gets a disability premium) or is in hospital or prison.
In each case, the work must be for 16 hours or more a week.
For HB, an extra £17.10 is disregarded if you work 16 hours or more and have a child or a disability, or work 30 hours or more and are aged 25 or over (and in some other cases).
For full details of the way earnings are treated, see CPAG’s Welfare Benefits and Tax Credits Handbook.