Working and your benefits

How much you earn and how many hours you work can affect your benefits.

Benefits covering extra costs of living

Some benefits cover some of the extra costs of living if you’re sick or disabled. They are not affected by your income. These include:

If your work suggests your needs have changed, you could be re-assessed for these benefits.

ESA and permitted work

You can earn up to £131.50 a week if:

  • you’re claiming ESA
  • you’re working for less than 16 hours a week
  • your work coach agrees that it’s permitted work

Employment and Support Allowance 

Permitted work 

If you go over these permitted work limits, your ESA claim will stop. You may be able to claim other benefits.

Calculate how claiming different benefits could affect you

Universal Credit

Working disabled people tend to be better off claiming Working Tax Credit. You cannot re-claim ESA once you’re claiming Universal Credit. A change in your income or even a one-off payment can trigger a move onto Universal Credit, so you might be worse off.

Universal Credit is affected by how much you earn. It’s not affected by the number of hours that you work. For every £1 you earn above your work allowance (if you qualify for one), your Universal Credit payment will reduce by 63p. If you make a new claim for Universal Credit, you will not get your first payment for at least 5 weeks.

Universal Credit works in a different way if you’re self-employed.

Universal Credit 

Self-employment and Universal Credit (GOV.UK)

Housing Benefit

If your income changes, ask to see a housing advisor at your local council. Tell them that you have had a change of circumstances. They will need to see your pay slips.

If you do not tell your council that your income changes, this could mean that you get the wrong amount of Housing Benefit:

If you are overpaid Housing Benefit, you must repay this to the council.

If you are underpaid Housing Benefit, this could mean you do not have enough to cover your rent.

Housing Benefit 

Working Tax Credit

You need to be working for at least 16 hours a week to qualify for Working Tax Credit and either:

  • do not live in a Universal Credit area
  • you and your partner qualify for Pension Credit 

Working Tax Credit eligibility criteria (GOV.UK)

Income Support and Jobseeker's Allowance

You cannot claim Income Support or Jobseeker's Allowance if you work more than 16 hours a week.

Carer's Allowance

You can earn less than £120 a week and claim Carer's Allowance if you are caring for someone for 35 hours a week or more.

Carer’s Allowance Eligibility criteria (GOV.UK)

When you start a new job

Always tell the Department for Work and Pensions (DWP) if you start a new job or if your work changes. If you’re claiming Housing Benefit, contact your local council.

Working 16 hours or more a week

If you are claiming ESA, working for more than 16 hours a week can leave you worse off depending on how much you earn.

Working for 16 hours or more a week may also mean that you’re not eligible for Income Support.

Calculate how working more might affect your income

Income Support and working 16 hours a week or more (entitledto)

Warning Accepting a job when you claim ESA

If you work 16 hours or more you will move onto Universal Credit and will not be able to claim ESA again. Consider carefully if it is worth working 16 hours or more.

When you get a pay rise

If you get a pay rise, your means-tested benefits may change or end because they are related to your earnings.

Use the benefits calculator to see how earning more might affect your benefits.

Pay rises and your benefits 

When you’re self-employed

Some benefits, such as Universal Credit, work differently if you’re self-employed. When you become self-employed, even if you are not earning, you must tell the DWP.

Self-employment and benefits 

Getting help managing your tax and benefits when you’re self-employed 

Last reviewed by Scope on: 03/05/2018

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Work and your benefits entitlement

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