Housing

Housing Benefit, Local Housing Allowance: Information that might affect our calculations

This area contains the following information about details that might affect our calculations:

Employment Status
Savings/Capital
The size of your family
Income from other household members

Employment Status

You will be treated as self employed if you pay your own Tax and National Insurance. We will need to see original evidence of your income. You will need to leave your accounts with us and we will call you when they are ready for collection or return them by recorded delivery.

The following are generally acceptable:

Most recent audited income and expenditure accounts
Your last six months income and expenditure books with receipts and invoices
Income and expenditure books with receipts and invoices for any other period if more representative of your current income, for instance, it may not be realistic to look at the winter months for a gardening business

The following is not generally accepted:

Unstructured bags of receipts and invoices - you may be asked to put them into an easy-to-understand format which could delay your claim

We will work out your total income for the period and deduct any allowable expenses and then work out your notional Tax and National Insurance liabilities; these are also deducted from your total income.
Deductible expenses are things like:

Purchase of stocks and supplies
Manufacturing materials and goods for resale
Carriage, packing and delivery costs
Employees wages and employers NI contributions
Hire, hire purchase and leasing charges
Subscriptions to professional and trade organisations
Legal fees and accountancy charges
Bank charges
Business travel and hotel expenses
Capital repayments on loans used to replace equipment or machinery
Capital or income spent on the repair of existing business assets (after deducting any insurance pay-out)
Interest payments on any business loan
Cleaning and protective clothing
Advertising, telephone, postage
Fuel

Expenses that are not generally deductible include:

Depreciation of any capital asset
Any sum used in the setting up or expansion of the business
Business entertainment expenses
Any sum for domestic or private use
Capital repayments on business loans

If you are in a partnership

We will need to know what percentage of the business is yours.

If you have a new business

We will need you to give a statement of your expected income (sometimes called projected income) for us to base the first thirteen weeks of your claim on. After that time we will write and ask to see your actual accounts.

If you are a childminder

We do not need to see all your income and expenditure, just your total income. We will disregard two thirds of this and work out your notional Tax and National Insurance liabilities on the third that is left.

If you are a Share Fisherman

The gross receipts and expenses of the fishing boat are required along with the agreed catching proceeds. The normal weekly earnings are then calculated by totalling the boat's gross receipt, deducting allowable expenses, then sharing the remaining sum among the crew, according to the distribution agreement.

Savings/Capital

Savings/Capital includes things such as:

Money in a bank or building society account
National Savings Certificates
Shares
Unit trusts
Income bonds

There are different rules for savings depending on your age. The first £6,000 of savings do not count in calculating income.

We treat any savings/capital you have over £6,000 as follows:

Under 60 years of age: For every £250 in part or whole that you have, a tariff income of £1 is added to your income for the calculation.
Over 60 years of age: For every £500 in part or whole that you have, a tariff income of £1 is added to your income for the calculation. For example, a 65 year-old with savings of £6,800 would attract a tariff income of £2.

Note: If your savings total £16,000 or more, you are excluded from claiming benefit.

When claiming financial help with your rent, you must tell us about all of your savings no matter how much or how little they are. You must also provide proof.

The size of your family

Every April the government sets an 'applicable amount' which represents the minimum amount of money that you can live on in a week.

It varies according to your status (single or couple); whether you have any children; whether you're sick or disabled.

The more your income is above the applicable amount the less Housing Benefit or Local Housing Allowance you'll get.

Income from other Household Members

We have to assume that anyone who lives in your home aged 18 or over (other than your partner or persons living in your home and paying you rent) is making a contribution to your household costs and is classed as a 'non-dependant'.

This means that, in most cases, we will make a deduction from your Housing Benefit or Local Housing Allowance. The amount of the deduction depends on the non-dependant's age, income and circumstances. It's important to realise that deductions will be made whether or not the non-dependant makes a contribution!

For more information about how we define 'non dependants' and the contributions we expect them to make to a household, please read our information about 'non-dependants'.

This page last updated: 27/03/2008