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Benefits when you have a low income

If you’re a single parent on a low income, you might be able to get extra money to boost your income. This could include:

Universal Credit has replaced a number of benefits for most people. Most people can no longer make a new claim for things like Housing Benefit or Jobseeker’s Allowance or tax credits.

If you’re already claiming benefits like these, you’ll be moved onto Universal Credit by March 2025. You can keep claiming them for now, but you may have to claim Universal Credit if your work or home situation changes.

The help you can get will depend on your income and specific circumstances. This page contains general guidance. For more tailored advice, please talk to us or use a benefits checker.

Universal Credit

Universal Credit can help with living costs like rent if you’re on a low income. It’s made up of a standard allowance plus extra payments if you have children, pay for childcare, have a disabled child, need help with housing costs, have a disability or health condition, or care for someone who is disabled. You may be eligible for some or all of these, depending on your situation.

Universal Credit is replacing many older benefits, such as:

  • Housing Benefit
  • Child Tax Credit 
  • Working Tax Credit
  • Income-related Employment & Support Allowance
  • Income-based Jobseeker’s Allowance 
  • Income Support

Important: If you make a claim for Universal Credit, you’ll stop getting any of these older benefits. Citizens Advice has useful information about moving to Universal Credits from other benefits.

You may be able to get Universal Credit if you:

  • Are on a low income (whether you’re out of work or working)
  • Have less than £16,000 in savings 
  • Live in the UK (there are extra rules if you’re not a British citizen)

More about Universal Credit

Claiming Universal Credit while working

There’s no upper income limit where you stop being eligible for Universal Credit – it depends on your situation. You can earn a certain amount of money before your Universal Credit is reduced. This is called the work allowance, and it’s related to your housing costs.

  • For parents with housing costs, the allowance is £673 a month
  • For parents without housing costs, the allowance is £404 a month

For every pound you earn over this allowance, your Universal Credit will drop by 55p (called an earnings taper). 

If you’re self-employed, different rules apply. Your Universal Credit will be calculated using the amount the government expects you to earn each month – this is called the minimum income floor. If you earn more than this, your Universal Credit will be based on your actual earnings. 

Our benefits checkers can help you work out what benefits you can get.

Read more about Universal Credit eligibility on the Citizens Advice website. You can make a claim for Universal Credit online on gov.uk.

Childcare costs

If you’re working and paying for registered childcare, you can get up to 85% of this cost paid through Universal Credit. The maximum support each month is £1014.63 for one child or £1739.37 for two or more children. You can’t get help with childcare costs if you have a tax-free childcare account or childcare vouchers from your employer.

Note: if you open a tax-free childcare account this will stop your Universal Credit payments altogether. If you’re not sure whether you’re better off claiming Universal Credit or having a tax-free childcare account, please talk to us

More on childcare costs when you’re working:

Housing costs

You may be able to get help with your housing costs – your rent and some service charges – through the housing element of Universal Credit. Shelter has more about this.

If you’re a homeowner, Universal Credit can’t help with your mortgage. But you may be able to get Support for Mortgage Interest instead.

Universal Credit has replaced Housing Benefit for most people. If you already get Housing Benefit, you can continue to get it until:

  • You’re moved onto Universal Credit in future
  • You choose to claim Universal Credit
  • Your circumstances change and you can no longer claim Housing Benefit

Shelter has more information, or you can talk to us.

Other benefits you could claim

You may be able to get other support too, depending on your situation. Make sure you claim for everything you could be getting. Talk to us if you’d like help in understanding what you could claim.

Child Benefit

You may be able to get Child Benefit if you’re the main carer. The amount you’ll receive will depend on your situation. 

More on Child Benefit (gov.uk)

Council Tax Reduction

If you’re on a low income and responsible for paying Council Tax, you may be eligible for Council Tax Reduction (sometimes called Council Tax Support). This can reduce your bill or even mean you don’t have to pay anything at all. How much you get depends on your income and circumstances.

There are other ways you can reduce your council tax bill. For example, if your children are under 18 and there’s no other adult in the house, you may be able to get 25% off your council tax. Your income doesn’t matter. If you share a home with an adult who’s studying full time or an apprentice/trainee, or someone who is severely mentally impaired (for example, who has dementia), you might still be able to get this discount. 

Every council has slightly different rules, so to find and more or apply for a Council Tax discount, contact your local council.

More on Council Tax discounts (gov.uk) 

Carer’s Allowance

If you spend at least 35 hours a week caring for a disabled person, you may be entitled to Carer’s Allowance. You could be caring for a disabled child or parent, for example, or someone you’re not related to. You have to be earning £132 or less each week to claim. 

You can find out more on our page on parenting a disabled child.

Personal Independence Payment

If you have a disability or long-term health condition that means you need help with everyday tasks or getting around, you may be eligible for a weekly benefit called Personal Independence Payment. You won’t be asked about your income or savings when you apply. Our page on disabled single parents has more.

Grants and loans

You may be eligible for a grant or loan to help with essential expenses such as rent, furniture, clothing and more. Our page on financial help has more information, including where to apply.

Tax credits

Universal Credit is gradually replacing tax credits for most people. So most people can no longer make a new claim for them. However, if you’re currently getting one tax credit, you can still make a claim for the other.

If you’re already getting tax credits, you can continue to claim them until:

  • You’re moved onto Universal Credit
  • You choose to claim Universal Credit instead of tax credits
  • Your circumstances changes and you can no longer claim tax credits

The information here only applies to people already claiming tax credits. If you’re not, you’ll need to make a new claim for Universal Credit.

There are 2 types of tax credits available to working single parents:

  1. Child Tax Credit – available whether you work or not and based on your income and how many children you have
  2. Working Tax Credit – if you’re on a low income and working 16 hours a week or more 

The amount you can get through these is related to your income in the previous tax year. 

There are times when you can still get Working Tax Credit even when you’re not actually working. For example:

  • In the first 39 weeks of maternity leave
  • If you’re off work because you’re ill for up to 28 weeks
  • For 4 weeks after a job ends or your hours drop below 16 a week
  • During the school holidays if you work 16 or more hours during term time only

Help with childcare costs

You can claim up to 70% of your childcare expenses through Working Tax Credit. The maximum amounts are 70% of £175 a week (£122.50) for one child, or 70% of £300 a week (£210) for two or more children.

You can get help with childcare costs up to the September after your child’s 15th birthday, or after their 16th birthday if they’re getting Disability Living Allowance or Personal Independence Payment, or are registered blind.

Reporting a change

If your working situation or other circumstances change, it’s important to tell HMRC as soon as possible. You must let them know about any changes within 1 month to make sure you’re not underpaid or overpaid. If you get tax credits you’re not entitled to, you’ll have to repay them.

You must tell HMRC within 1 month if:

  • Your working hours fall below 16 or 30 hours a week
  • The number of children you’re caring for changes
  • A new partner moves in
  • You stop working
  • You leave the UK for more than 8 weeks
  • You stop paying for childcare, or your childcare costs drop by £10 a week for more than 4 weeks in a row

See a full list of all the changes you have to report

You can let them know about a change:

  • Online through HMRC’s tax credits service
  • By calling the tax credits helpline on 0345 300 3900
  • By writing to HMRC Tax Credit Office, BX9 1LR

Date last updated: 22 April 2024

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