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Service users and carers
Welfare benefits guidelines
Work and benefits – a basic guide
This is a basic guide only, intended as an introduction to the types of work you can do while staying on Income Support or Incapacity Benefit. For more detailed information you must seek specialist benefit advice.
1. Voluntary work
There is no effect on your benefits unless the type of work and number of hours suggest you are now fit for work.
2. Working less than 16 hours per week
You are not allowed to earn more than £81 per week, otherwise your benefits will stop.
There are two routes to this:
Permitted Work – you need to get the work agreed beforehand by the Disability Employment Adviser at your local Jobcentre Plus. You will then be allowed to continue working in this manner for 52 weeks.
Supported permitted work – this is a better option as you are allowed to continue indefinitely. The work must be supported by a mental health professional showing they are regularly offering you support to maintain the work, eg you can discuss any problems you are having at work with them. You must confirm the place of work, hours and duties in writing to the Department of Work & Pensions (DWP) and should keep a copy of this letter and confirmation that the DWP have received it.
Effect on benefits:
Income Support
The first £20 you earn is disregarded; the remainder is deducted from benefit £1 for £1. For example, you receive £78 Income Support and now work and earn £30. The first £20 is disregarded and £10 is deducted from your Income Support payment. Therefore you will receive £68 Income Support plus £30 wages.
Incapacity Benefit
Wages have no effect on Incapacity Benefit.
Housing Benefit and Council Tax Benefit
(Note – The below applies only once Income Support stops, otherwise full Housing Benefit/Council Tax Benefit is paid)
The first £20 is disregarded
65% of the remainder is deducted from any Housing Benefit award 20% is deducted from any Council Tax Benefit award.
For example:
you receive £50 Housing Benefit, £5 Council Tax Benefit - you now earn £30 a week.
£20 of this is disregarded, leaving £10.
£6.50 is deducted from Housing Benefit, £2 from Council Tax Benefit.
Therefore you now get £43.50 Housing Benefit and £3 Council Tax Benefit plus £30 wages.
3. Working more than 16 hours per week
- Income Support/Incapacity Benefit will stop.
You may be entitled to Working Tax Credit (WTC); telephone the Tax Credits Helpline on 0845 300 3900 and ask for the form TC600.
- Housing Benefit/Council Tax Benefit may continue depending on earnings.
When your benefits stop you may receive a Welfare to Work beneficiary letter. You should keep this as it will enable you to get back on to the same rate of benefit if you cannot continue with your work within a year because of illness.
