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Increase Your Income

Lots of people are in debt because they don’t receive all the money they are entitled to. Before you work out your business and household budget, use this section to see if you can increase your income.

Benefits and Tax Credits

There is a range of different types of benefits that you might beentitled to receive. This will depend on your particular circumstances.

Some benefits are based on the national insurance contributions you have paid. These include contributory Jobseeker’s Allowance, Incapacity Benefit, pensions and maternity benefits.

Other benefits are means tested. This means the amount of help you get depends on how much money you already have coming in to your home.There are also limits on the amount of savings you are allowed to have and still claim. These benefits ‘top up’ any income you already have. You do not have to have paid National Insurance contributions to claim them.

Income-based Jobseeker’s Allowance

This is for people working less than 16 hours per week who are signing on for work.

Although it is more difficult for someone who is self-employed to establish the number of hours a week they work than it is if you are in employment, if you supply full details to the Department for Work and Pensions (DWP), you may be able to claim this benefit rather than ceasing to trade altogether.

It can also ease the transition in running your business down and looking for employment if this is your choice.

The DWP would expect you to take up full-time employment if offered to you.

Income Support

This is for people who do not have to sign on for work (e.g. because they are sick or caring for someone).

Pension Credit

This replaced Income Support (minimum income guarantee) from October 2003. You can claim if you are 60 or over. The amount you are entitled to depends on your income.

There is an extra credit called ‘Savings Credit’, if you or your partner are 65 or over. This rewards you for having moderate savings.The amount you get will depend on how much money you have saved.

Working Tax Credit

Working Tax Credit can be paid on top of your wages if you are on a low income. It replaced Working Families’ Tax Credit and Disabled Person’s Tax Credit in April 2003.

Many self-employed people are not aware that they can claim this benefit. There are several ways in which you can qualify. These include:

if you or your partner are employed or self-employed for more than 16 hours per week and are bringing up one or more children. If you qualify by this route, the credit can also help with childcare costs in certain circumstances;
if you or your partner are employed or self-employed for more than 16 hours per week and have a disability that creates a disadvantage in getting a job;
if you or your partner started work in the last three months and are over 25 years of age and are employed or self-employed for 30 hours per week or more, or over 50 years of age and employed or self-employed for 16 hours or more, and in either case, have received Income Support, Jobseeker’s Allowance or Incapacity Benefit within the last six months.

Child Tax Credit

Child Tax Credit is also available if you have responsibility for children under 16 (or under 19 and in full-time education). It can be paid to individuals who are in or out of work, including the self-employed.

The amount you get depends on your income. For information on tax credits ring the tax credit helpline on 0845 300 3900.

Education Maintenance Allowance

If you have children aged 16 plus who are staying on at school or college, they may qualify for up to £30 a week, depending on your household income.

For information ring the EMA helpline on 0808 101 6219.

Housing Benefit

You may be able to get help with paying rent on your domestic premises if you are on a low income. Contact your local council’s housing benefit office for a form.

Council Tax Benefit

You may be able to get help with paying all or part of your Council Tax if you are on a low income. See Council Tax.

Other benefits

Some benefits are not means tested, nor do you have to have paid any National Insurance contributions in order to claim them. These include Child Benefit if you have dependent children.

There are also benefits for people with disabilities, such as Disability Living Allowance, Attendance Allowance and Carers’ Allowance for their carers.

Whether you can claim any of these benefits will depend on the nature of your illness or disability and the effect it has on you.

Department for Work and Pensions (DWP)
The benefits agency has become the Department for Work and Pensions, which includes the Job Centre Plus network, the Pension Service, the Disability and Carers Service and the Child Support Agency. We sometimes refer to the DWP for short. Working Tax Credit and Child Tax Credit are dealt with by HM Revenue and Customs.

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