The basis of the benefit calculation
If you are receiving Income Support, Jobseekers Allowance (income-based) or Employment and Support Allowance (income related), you will be entitled to maximum benefit.
This will be 100% of the ‘eligible rent’ and/or Council Tax, less any non dependant deductions. For people of working age maximum help is limited to 80% of Council Tax.
If you are working we will take your gross weekly income and your partner's, if applicable, and make deductions for any income tax, national insurance and 50% of any contributions towards a pension scheme. We will also deduct an amount known as an ’earnings disregard’ - an amount of your earnings we will ignore based on your individual circumstances.
We will take into account any other income you have such as, State Retirement Pension or disability benefits - although some income may be disregarded in the calculation.
If you have savings, for those of working age we will add a further £1.00 for every £250 (or part of £250) you have over £6,000. If you are a pensioner we will add £1.00 for every £500 (or part of £500) you have over £10,000.
If you have more than £16,000 you will not be entitled to benefit unless you are getting Guarantee Pension Credit.
We will compare your total weekly income to your applicable amount. This figure is set by the Government to represent the basic living needs of a claimant and family. It is made up of:
- A claimant's personal allowance
- A personal allowance for a partner and dependant children
- A premium, for example a family premium or disability premium
If your income is lower than your applicable amount you will be entitled to maximum benefit. Otherwise it will be reduced by 65% (20% for Council Tax purposes) of the difference between your income and your applicable amount.
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