Benefits can make a huge difference to a household budget, and they are available to more people than you may think. There are benefits for a very wide range of different situations, from raising kids, to caring for a disabled relative (even part time) to help with the cost of your rent.

Some benefits take into account your income and assets, in a process known as means testing, which excludes wealthier families and individuals from accessing them. However, other benefits are either not means tested at all, or have relatively high thresholds for when the means test kicks in and reduces the benefits.

There are also certain benefits that count towards your National Insurance record, which means that it is worth applying even if you aren’t eligible due to means testing, as it can still add towards the amount of State Pension you receive when you retire.

In this article, we’re going to provide a broad overview of some of the main benefits that are available, and point you in the direction of some fantastic resources and calculators that can help inform you on what benefits you might be eligible for. It’s not an exhaustive list of everything, and we recommend you use the free calculator from EntitledTo or Turn2Us to get more specific information on what you might be eligible for.

Benefits for Families

There are a large range of benefits that you can be eligible for if you have children. Some of these are payable as a one time grant, and others are payable on an ongoing basis. Some are means tested and some are paid to everyone regardless of their financial circumstances.

Child Benefit

This is paid to parents who have children, and is paid until they are up to age 20 as long as they remain in formal education or training. It’s tax free, but you might have to pay tax if either Mum or Dad earns over £50,000 and you lose the benefit entirely if either of you earn over £60,000. Still, it’s worth applying even if you’re over this as this is a benefit that adds to one parent’s National Insurance record to build up eligibility to the State Pension.

Universal Credit

This replaced a number of different benefits, one of which was the family specific Child Tax Credit. This provided additional support for those who have children and also have a low income. You can still apply for Universal Credit under the same conditions, however now you will also be assessed for other benefits in conjunction with the old Child Tax Credit. If you are already receiving Child Tax Credit then you can continue on it as normal.

Benefits for Job Seekers

For people who are looking for work, there are a couple of different benefits that fall under the category of Jobseeker’s Allowances (JSA). In order to be eligible for those, you need to be without work or working an average of less than 16 hours each week. There is another form of JSA - Income Based JSA - which falls under the section further down for those on low incomes.

New-Style JSA

This is the most common type of JSA now. In order to receive this you need to conduct various activities centred around helping you re-enter the workforce. This includes things like training days and a certain number of job applications and interviews each week. This form of JSA isn’t means tested, but eligibility is based on how much you contributed to National Insurance in the last 2 to 3 years on an employed basis.

Benefits for Low Incomes

There used to be a lot of different benefits for people on low incomes to help with the cost of living. Now, these benefits have mostly been combined into Universal Credit for new applicants. Because of the way this is done, it can be confusing to understand what you might be eligible for, because there are many different components to the one benefit. This is where the Entitled To and Turn2Us calculators are really worthwhile.

In order to be eligible for Universal Credit, you generally need to be out of work or have a low income and have less than £16,000 in savings. If you're the member of a couple, their income and assets will be also used when calculating your entitlement. There is a standard allowance for Universal Credit, and then other supplements for things like housing costs and extra help if you’re caring for children or people with disabilities.

Benefits for Disability & Illness

For people who have long term illness or disabilities, you can also apply for benefits to help with your living expenses. There are 2 main benefits in this area, which are Disability Living Allowance (DLA) and Personal Independence Payment (PIP).

Disability Living Allowance

DLA is now only available for new applicants under the age of 16. This helps with the additional costs incurred with having a disability, and has 2 components that are assessed at different levels.

These 2 components are the Care component, which is based on the level of additional support the applicant needs for activities of daily living, and the Mobility component, which is based on the applicant's ability to move around by themselves.

Personal Independence Payment

For those with disabilities over the age of 16 but under State Pension age, you may be eligible for Personal Independence Payment. Like DLA, PIP is based on the level of impact that a disability has on your daily life. Like DLA, there is a component based on your ability to perform daily living tasks, and your mobility. In both cases, the applicant is assessed and then given a period of time before they will need to be assessed again.

For both DLA and PIP, you can also forfeit the mobility component of the payment for a car, wheelchair accessible vehicle or a powered wheelchair through the Motability Scheme. This can be a great option to get a reliable vehicle if you don’t have the funds to purchase one yourself. It’s a big decision though, so you need to make sure it's right for you.

The person providing the care to someone eligible for DLA or PIP may also be eligible for Carer’s Allowance if they provide care for over 35 hours per week, and this is not means tested.

Benefits for the Elderly

Once you reach State Pension age, you stop being eligible for many of the above benefits like DLA or JSA. Instead, you become eligible for specific benefits for those over State Pension age.

State Pension

The main benefit for the elderly is the State Pension. The age you become eligible for the State Pension is currently 66, but this is gradually increasing up to 68 by 2039. Your eligibility to the State Pension (also known as the New State Pension) is based on the number of years you either paid, or were exempt from, National Insurance contributions.

In order to receive some State Pension, you need to have paid contributions or been exempt for 10 year. In order to get a full State Pension you now need to have 35 years on your National Insurance record. It’s really important to keep in mind that you can make voluntary National Insurance contributions to make up for gaps in your record, and this is often worth considering as it can be worthwhile.

Attendance Allowance

This is a Disability Benefit for those over State Pension age. Like DLA or PIP, it is to allow for the fact that some people need extra help with getting around and with their activities of daily living. Again, this will be based on the level of need and how much assistance you need on a day to day basis. The person providing the care may also be eligible for Carer’s allowance if they provide care for over 35 hours per week, and this is not means tested.

Summary

The benefits system is really detailed and complex to navigate. The best advice to find out what benefits you might be entitled to, is to use the excellent free calculators available from Turn2Us and EntitledTo.

This will provide you with a great summary of the benefits to apply for. If you’re denied benefits that you believe you are eligible for, you can also appeal the decision, and organisations such as Citizens Advice can help you with navigating this process.

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