How your income affects your benefit entitlement
Normally we will ask for 5 consecutive weekly, or 2 monthly wage slips from each job you and your partner (if any) have. From these we will calculate your average weekly or monthly wage. The amount we use for working out your benefit is your Net Earned Income, this is calculated by deducting all Income Tax and National Insurance you pay from your gross income, we also deduct half of any private pension or Superannuation contributions. N.B. Earned income also includes Sick Pay and Maternity Pay.
Not all of your Net Earned Income is used when working out your benefit. Certain items are ignored, for example:
- The first £5 of a single person's net earned income.
- The first £10 of a couple's net earned income.
- The first £25 of a lone parent's net earned income.
- The first £20 of a person with a disability's net earned income.
The table below lists the most common types of unearned income. We will normally use the full amount of this income to work out your benefit, however in some cases we can disregard some or all of this income.
|Type of Income||How much is used in working out your benefit|
|Incapacity Benefit (Lower)||All|
|Incapacity Benefit (Middle)||All|
|Incapacity Benefit (Higher)||All (but £20 is disregarded from any earned income)|
|Industrial Disablement or Injuries Benefit||All|
|Industrial Death Benefit||All|
|Carers Allowance||£20 disregarded if your carer is working|
|Jobseeker-s Allowance (Contribution Based)||All|
|Jobseeker-s Allowance (Income Based)||None|
|Child Maintenance Received||None|
|New Deal Grant||None|
|Private Pension or Employer Pension Scheme||All, but any tax paid is disregarded|
|Severe Disablement Allowance||All (but £20 disregarded from any earned income)|
|War Disablement Pension||None|
|War Widows Pension||None|
|Working Tax Credit (WTC)||£17.10 disregarded if working over 30 hours per week|
|Works Pension/Superannuation||All, but any tax paid is disregarded|
Some of these Unearned Incomes are also awarded extra "Premiums" which can increase your benefit.
If we do not know what your income is or do not have proof of your income, we will use notional income of £999.99 per week.
Last reviewed: 06 - 10 - 2015